Question
The following amounts were reported by Liquid Company in its most recent statement of financial position: Cash $47,100 Accounts receivable (net) 130,000 Short-term investments 21,000
The following amounts were reported by Liquid Company in its most recent statement of financial position:
| Cash | $47,100 | ||
| Accounts receivable (net) | 130,000 | ||
| Short-term investments | 21,000 | ||
| Inventory | 390,000 | ||
| Prepaid insurance | 34,500 | ||
| Property, plant, and equipment (net) | 960,000 | ||
| Accounts payable | 83,000 | ||
| Wages payable | 37,000 | ||
| Income tax payable | 65,000 | ||
| Sales tax payable | 10,000 | ||
| Notes payable (due within one year) | 88,000 | ||
| Bank loan payable (due in three years) | 50,000 |
(a) Calculate the current ratio and quick ratio for Liquid Company. (Round answers to 2 decimal places, e.g. 15.25.)
| Current ratio | Enter current ratio rounded to 2 decimal places. | ||
|---|---|---|---|
| Quick ratio | Enter quick ratio rounded to 2 decimal places. |
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Principles of Auditing and Other Assurance Services
Authors: Ray Whittington, Kurt Pany
20th edition
77729145, 978-1259295430, 1259295435, 978-0077729141
