A Corporation Reports the Following Year-End Balance Sheet Data A)058
B)1

question 223

Multiple Choice

A corporation reports the following year-end balance sheet data.The company's acid-test ratio equals: $$\begin{array} { l r l r r } \text { Cash } & \$ 40,000 & \text { Current liabilities } & \$ 5,000 \\\text { Accourts receivable } & 55,000 & \text { Long-temn liabilities } & 35,000 \\\text { Irventory } & 60,000 & \text { Cormon stock } & 100,000 \\\text { Equiprment } & \underline{145,000} & \text { Retaired earnirgs } & \underline{90,000} \\\text { Total assets } & \underline{\$ 300,000} & \text { Total liabilities ard equity } & \underline{\$ 300,000}\end{array}$$

• A)0.58
• B)1.27
• C)2.07
• D)0.37
• E)0.63

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Definitions:

Revenues And Expenses

The income a business earns from its operations and the costs incurred to generate that income.

Payroll Taxes

Taxes that are withheld from employees' wages by their employer and paid to the government, often including social security and medicare taxes.

Social Security Taxes

Taxes collected from employees and employers to fund the Social Security program, which provides benefits to retirees, disabled persons, and survivors of deceased workers.

Unfunded Pension Liability

The shortfall between the present value of the pension obligations to employees and the assets set aside to meet those obligations.