Dennisport Corporation Has an Acid-Test Ratio of 2

question 145

Multiple Choice

Dennisport Corporation has an acid-test ratio of 2.5.It has current liabilities of $40,000 and noncurrent assets of $70,000.The corporation's current assets consist of cash,marketable securities,accounts receivable,prepaid expenses,and inventory; it has no short-term notes receivable.If Dennisport's current ratio is 3.1,its inventory and prepaid expenses must be:

• A) $12,400
• B) $24,000
• C) $30,000
• D) $40,000

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