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	$	192		$	152
Accounts receivable, net		300			320
Inventory		152			162
Prepaid expenses		56			56
Total current assets		700			690
Plant and equipment, net		860			860
Total assets	$	1,560		$	1,550
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	162		$	182
Accrued liabilities		106			106
Notes payable, short term		76			86
Total current liabilities		344			374
Bonds payable		328			338
Total liabilities		672			712
Stockholders' equity:
Common stock, $2 par value		132			132
Additional paid-in capital		280			280
Retained earnings		476			426
Total stockholders' equity		888			838
Total liabilities & stockholders' equity	$	1,560		$	1,550

Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account)	$	1,950
Cost of goods sold		1,100
Gross margin		850
Selling and administrative expenses		439
Net operating income		411
Interest expense		67
Net income before taxes		344
Income taxes (30%)		103
Net income	$	241

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

Brewer_8e_Rechecks_2019_10_30

Multiple Choice

• 1.66

• 1.12

• 1.43

• 2.09