Question compute the current ratio and acid-test ratio for, Ask an Expert

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Question: Compute the current ratio and acid-test ratio for each of the following separate cases. (Round ratios to two decimals.) Which company case is in the best position to meet short-term obligations? Explain.

Case A Case B Case C

Cash . . . . . . . . . . . . . . . . . . . . . . . . ` $ 800 $ 510 $3,200

Short-term investments . . . . . . . . 0 0 1,100

Current receivables . . . . . . . . . . . . 0 790 800

Inventory . . . . . . . . . . . . . . . . . . . . 2,000 1,600 1,900

Prepaid expenses . . . . . . . . . . . . . . 1,200 600 300

Total current assets . . . . . . . . . . . . $4,000 $3,500 $7,300

Current liabilities . . . . . . . . . . . . . . $2,200 $1,100 $3,650

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92341747

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