Using the Following Year-End Information for Calvin's Clothing, Calculate the Current

question 244

Multiple Choice

Using the following year-end information for Calvin's Clothing, calculate the current ratio and acid-test ratio for the business: $$\begin{array} { l r } \text { Cash } & \$ 52,000 \\\text { Short-term investments } & 12,000 \\\text { Accounts receivable } & 54,000 \\\text { Inventory } & 325,000\end{array}$$ $$\begin{array} { l r } \text { Prepaid expenses } & 17,500 \\\text { Accounts payable } & 106,500 \\\text { Other current payables } & 25,000\end{array}$$

• A) 1.97 and 1.52
• B) 1.80 and 0.90
• C) 3.50 and 0.90
• D) 1.80 and 1
• E) 2.73 and 1.52

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