Refer to the Following Selected Financial Information from McCormik, LLC

question 93

Multiple Choice

Refer to the following selected financial information from McCormik, LLC. Compute the company's acid-test ratio for Year 2. $\begin{array}{|l|r|r|}\hline & \text { Year 2 } & {\text { Year 1 }} \\\hline \text { Cash } & \$ 37,500 & 36,850 \\\hline \text { Short-term investments } & 90,000 & 90,000 \\\hline \text { Accounts receivable, net } & 85,500 & 86,250 \\\hline \text { Merchandise inventory } & 121,000 & 117,000 \\\hline \text { Prepaid expenses } & 12,100 & 13,500 \\\hline \text { Plant assets } & 388,000 & 392,000 \\\hline \text { Accounts payable } & 113,400 & 111.750 \\\hline \text { Net sales } & 711,000 & 706,000 \\\hline \text { Cost of goods sold } & 390,000 & 385,500 \\\hline\end{array}$

• A)1.98.
• B)3.05.
• C)1.88.
• D)2.26.
• E)2.95.

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Definitions:

Symbolic Notation

A system of symbols used to represent quantities, operations, relations, or elements in a concise and standardized format.

Atomic Components

Atomic components refer to the smallest units within a framework or system that cannot be broken down further without losing their functionality.

Inference Forms

The structures or patterns of logical reasoning where conclusions are drawn from premises based on rules of logical thinking.

Conj

A shortened form for "conjunction," representing words that function to connect words, phrases, clauses, or sentences.