Use the Following Data to Calculate the Current Ratio A)207 : 1
B)1

question 10

Multiple Choice

Use the following data to calculate the current ratio. Carne Auto Supplies
Balance Sheet
December 31, 2017
$\begin{array}{lrlr}\text { Cash } & \$ 70,000 & \text { Accounts payable } & \$ 130,000 \\\text { Accounts receivable } & 100,000 & \text { Salaries and wages payable } & 20,000 \\\text { Inventory } & 140,000 & \text { Mortgage payable } & 180,000 \\\text { Prepaid insurance } & 80,000 & \text { Total liabilities } & \$ 330,000 \\\text { Stock investments } & 180,000 & &\\\text { Land } & 190,000 \\\text { Buildings } \quad \$ 230,000 &&\text { Common stock }&\$240,000\\\text { Less: Accumulated }&&\text { Retained earnings }&500,000\\\text { depreciation }\quad(60,000) &170,000&\text { Total stockholders' equity }&\$740,000\\\text { Trademarks } & 140,000&\text { Total liabilities and }\\\text { Total assets }&\$1,070,000&\text { stockholders' equity }&\$1,070,000\end{array}$

• A)2.07 : 1
• B)1.67 : 1
• C)3.00 : 1
• D)2.60 : 1

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