At the Beginning of the Year, Megaron Company's Balance Sheet

question 124

Multiple Choice

At the beginning of the year, Megaron Company's balance sheet showed current assets of $16,000 and current liabilities of $10,000. During the current year, Megaron issued common stock for $5,000 for cash and purchased $3,000 of inventory on account. After these transactions were recorded, Megaron's current ratio was:

• A) 1.17.
• B) 1.60.
• C) 1.85.
• D) 2.10.

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