The Current Assets and Current Liabilities for Kolbie Company and Newton

question 72

Essay

The current assets and current liabilities for Kolbie Company and Newton Company are shown as follows at the end of 2012.
*These represent prepaid expenses and other non-quick current assets.
Required:
(1) Determine the quick ratio for both companies. Round to two decimal places.
(2) Interpret the quick ratio difference between the two companies.

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Definitions:

Gustatory Hairs

Microscopic hairs located on taste buds that are sensitive to tastants in food, leading to the perception of taste.

Gustatory Cells

Gustatory cells are specialized epithelial cells located within the taste buds of the tongue, responsible for the perception of taste stimuli.

Basal Cells

Cells found at the bottom layer of epithelial tissues, involved in constant regeneration and repair of the surface tissue.

Olfactory Adaptation

The process by which the sense of smell becomes accustomed to a continuous or repetitive odor, leading to a decreased sensitivity to that odor.