Use the Following Data to Calculate the Current Ratio A)234 : 1
B)2

question 58

Multiple Choice

Use the following data to calculate the current ratio. $\begin{array} { l } \text {Edie's Flomer Shoppe }\\\text {Balance Sheet }\\\text { December 31,2022 }\\\begin{array}{lr}\text { Cash } & \$ 126,000 \\\text { Accounts receivable } & 120,000 \\\text { Inventory } & 210,000 \\\text { Prepaid insurance } & 90,000 \\\text { Stock investments } & 255,000 \\\text { Land } & 285,000\\\text { Buildings } & \$ 339,000 & \\\text { Less: Accumulated } & & \\\quad \text { depreciation } (60,000) & 279,000 \\\text { Trademarks } & 210,000 \\\text { Total assets } & \$ 1575,000\end{array}&\begin{array}{lr}\text { Accounts payable } & \$ 165,000 \\\text { Salaries and wages payable } & 30,000 \\\text { Mortgage payable } & 270,000 \\\hline \text { Total liabilities } & 465,000\\\\\\\text { Common stock } & \$ 360,000 \\\text { Retained earnings } &{750,000}\\\text { Total stockholders' equity } & 1,110,000 \\\text { Total liabilities and } & \\\text { stockholders' equity } & \$ 1,575,000\end{array}\end{array}$

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Definitions:

Retirement Accounts

Financial accounts that offer tax benefits and are specifically designed to save and invest for retirement.

Lump Sum Amount

A single payment made for a particular purpose, rather than payments made in installments.

Employee Retirement Income Security Act

A federal law that sets minimum standards to ensure that voluntary, private industry pension and health plans are established and maintained in a fair and financially sound manner.

Private Retirement Plans

Financial plans that individuals or employers establish to save for retirement, which can include 401(k) plans, IRAs, and other savings models.