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Rufina [12.5K]
1 year ago
13

From the information given below, calculate the quick ratio. Particulars Amount (in $) Particulars Amount (in $) Cash 20,000 Acc

ounts payable 11,000 Notes receivable 15,000 Wages payable 5,000 Stock 5,000 Retained earnings 20,000 Inventory 6,000 Notes Payable 8,000 a. .83 times b. 1.08 times c. 1.25 times d. 1.63 times
Business
1 answer:
Nat2105 [25]1 year ago
7 0

Answer:

C. 1.25 times

Explanation:

Given: Cash 20,000 Accounts payable 11,000 Notes receivable 15,000 Wages payable 5,000 Stock 5,000 Retained earnings 20,000 Inventory 6,000 Notes Payable 8,000.

Current asset: Cash.

Current Liability: Accounts payable.

Now, calculating the quick ratio.

Formula; Quick ratio= \frac{Current\ asset- Inventory}{Current\ liability}

⇒ Quick ratio= \frac{20000- 6000}{11000}

⇒ Quick ratio= \frac{14000}{11000}

∴ Quick ratio= 1.27 ( 1.25\ is\ closest\ options\ given)

Hence, Quick ratio is 1.25 times

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On January 1, 2017, Dagwood Company purchased at par 6% bonds having a maturity value of $300,000. They are dated January 1, 201
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Dagwood bonds receivables   300,000 debit

                             Cash                              300,000 credit

--to record purchase of bonds--

Interest receivables                     18,000 debit

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