Freiman Corporation's most recent balance sheet and income statement appear below:

Balance Sheet
December 31, Year 2 and Year 1
(in thousands of dollars)
	Year 2			Year 1
Assets
Current assets:
Cash	$	200		$	160
Accounts receivable, net		320			340
Inventory		160			170
Prepaid expenses		60			60
Total current assets		740			730
Plant and equipment, net		900			900
Total assets	$	1,640		$	1,630
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	170		$	190
Accrued liabilities		110			110
Notes payable, short term		80			90
Total current liabilities		360			390
Bonds payable		340			350
Total liabilities		700			740
Stockholders' equity:
Common stock, $2 par value		140			140
Additional paid-in capital		300			300
Retained earnings		500			450
Total stockholders' equity		940			890
Total liabilities & stockholders' equity	$	1,640		$	1,630

Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account)	$	2,110
Cost of goods sold		1,180
Gross margin		930
Selling and administrative expenses		459
Net operating income		471
Interest expense		75
Net income before taxes		396
Income taxes (30%)		119
Net income	$	277

The acid-test (quick) ratio at the end of Year 2 is closest to:

Brewer_8e_Rechecks_2019_10_30

Multiple Choice

• 1.16

• 1.44

• 1.70

• 2.13