Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $53,900; total assets, $179,400; common stock, $81,000; and retained earnings, $46,202.) CABOT CORPORATION Balance Sheet December 31 of current year Assets Liabilities and Equity Cash $ 16,000 Accounts payable $ 17,500 Short-term investments 9,200 Accrued wages payable 3,000 Accounts receivable, net 32,600 Income taxes p

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Compute the current ratio and acid-test ratio.

(1)	Current Ratio
	Numerator:	/	Denominator:	=	Current Ratio
	Current assets	/	Current assets	=	Current ratio
	$96,450	/	$24,200	=	4.0	to 1
(2)	Acid-Test Ratio
	Numerator:	/	Denominator:	=	Acid-Test Ratio
	Quick assets	/	Current liabilities	=	Acid-Test Ratio
		/		=	0	to 1