Refer to the Following Selected Financial Information from Dodge Company

question 120

Multiple Choice

Refer to the following selected financial information from Dodge Company.Compute the company's acid-test ratio. $\begin{array}{lr}\text { Cash } & \$ 42,250 \\\text { Short-term investments } & 60,000 \\\text { Accounts receivable, net } & 79,500 \\\text { Merchandise inventory } & 115,000 \\\text { Prepaid expenses } & 9,700 \\\text { Accounts payable } & 111,400\end{array}$

• A)2.75.
• B)2.66.
• C)0.92.
• D)1.12.
• E)1.63.

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Definitions:

Equitable Estoppel

The principle that when a gratuitous promise to do something in the future causes a person who relies on that promise to incur an expense, the promisor will not be allowed to enforce other contractual rights that are inconsistent with that promise; the promise can only be used as a defense by the promisee; also known as promissory estoppel.

Natural Person

An individual human being, as opposed to a legal entity like a corporation or government.

Legal Bound

Being officially restrained by law or legally obliged to perform or refrain from performing certain actions.

Presumptions

Assumed facts or principles that are taken as true until disproven, often used in legal contexts.