Dennisport Corporation Has an Acid-Test Ratio of 2

question 145

Multiple Choice

Dennisport Corporation has an acid-test ratio of 2.5.It has current liabilities of $40,000 and noncurrent assets of $70,000.The corporation's current assets consist of cash,marketable securities,accounts receivable,prepaid expenses,and inventory; it has no short-term notes receivable.If Dennisport's current ratio is 3.1,its inventory and prepaid expenses must be:

• A) $12,400
• B) $24,000
• C) $30,000
• D) $40,000

---

Definitions:

Cattle Manure

Cattle manure refers to the waste produced by cows, consisting of feces and urine, used as a natural fertilizer in agriculture.

Fertilizer Industry

involves the production, distribution, and sale of chemical or natural substances that enhance plant growth and soil fertility.

Computer Scientists

Professionals who specialize in the study of computing, including the design of software, computational systems, and data processing.

Wage Increase

An upward adjustment in the amount of compensation employees receive for their work, often aimed at keeping up with inflation or recognizing increased productivity.