Refer to the Following Selected Financial Information from McCormik, LLC

question 34

Multiple Choice

Refer to the following selected financial information from McCormik, LLC. Compute the company's acid-test ratio for Year 2. $$\begin{array} { | l | r | r | } \hline & { \text { Year 2 } } & { \text { Year 1 } } \\\hline \text { Cash } & \$ 37,500 & 3 6 , 8 5 0 \\\hline \text { Short-term investments } & 90,000 & 90,000 \\\hline \text { Accounts receivable, net } & 85,500 & 86,250 \\\hline \text { Merchandise inventory } & 121,000 & 117,000 \\\hline \text { Prepaid expenses } & 12,100 & 13,500 \\\hline \text { Plant assets } & 388,000 & 392,000 \\\hline \text { Accounts payable } & 113,400 & 111.750 \\\hline \text { Net sales } & 711,000 & 706,000 \\\hline \text { Cost of goods sold } & 390,000 & 385,500 \\\hline\end{array}$$

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

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Definitions:

Prefrontal Cortex

The part of the brain located at the front of the frontal lobe, important in decision making, cognitive control, social behavior, and emotional regulation.

Limbic System

A complex system in the brain involved in emotions, memories, and arousal (or stimulation).

Hypothalamus

A region of the brain that plays a crucial role in many essential functions, including hormone release, regulation of body temperature, and maintaining daily physiological cycles.

Amygdala

A section of the brain that is primarily involved in emotional processes, including fear and pleasure responses.