Calculate the Current Ratio Using the Following Information: (Round Your

question 31

Multiple Choice

Calculate the current ratio using the following information: (Round your answer to two decimals. ) $$\begin{array} { l l } \text { Cash } & \$ 6,000 \\\text { Accounts Receivable } & 1,300 \\\text { Prepaid Rent } & 1,100 \\\text { Land } & 20,000 \\\text { Equipment } & 6,000 \\\text { Accumulated Depreciation } & 1,000 \\\text { Accounts Payable } & 5,000 \\\text { Salaries Payable } & 1,000 \\\text { Notes Payable-long term } & 8, 000\end{array}$$

• A)1.40
• B)1.68
• C)1.44
• D)1.22

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Definitions:

Net Pay

The amount of money an employee takes home after deductions like taxes and retirement contributions have been subtracted from their gross pay.

Federal Insurance Contributions Act

A U.S. law that mandates the collection of Social Security and Medicare taxes from employees' paychecks and employers.

Employer Requirement

The obligations and duties that an employer must fulfill towards their employees, including wages, benefits, and working conditions.

Withholding Taxes

Taxes that employers deduct from employees' wages and pay directly to the government as a part of income tax obligations.