Calculate the Current Ratio Using the Following Information A)23
B)1

question 6

Multiple Choice

Calculate the current ratio using the following information: $$\begin{array} { | l | l | } \hline \text { Cash } & \$ 7000 \\\hline \text { Accounts receivable } & 1400 \\\hline \text { Prepaid rent } & 800 \\\hline \text { Land } & 20,000 \\\hline \text { Equipment } & 6000 \\\hline \text { Accumulated depreciation } & 1200 \\\hline \text { Accounts payable } & 4000 \\\hline \text { Salaries payable } & 800 \\\hline \text { Loan payable, non-current } & 10,000 \\\hline\end{array}$$

• A)2.3
• B)1.92
• C)1.32
• D)1.75

---

Definitions:

Trust

A legal arrangement in which one party holds property or assets for the benefit of another, guided by the terms set in the trust agreement.

Interest Earnings

Income received from investments in interest-bearing financial instruments, such as savings accounts, CDs, or bonds.

Compounded Semi-Annually

Interest calculation method where interest is added to the principal sum twice a year, leading to interest earning interest over time.

Annual Scholarship

A financial award given to students on a yearly basis to support their education.