acid test ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
1.The acid test ratio in year 2021 is as follows:
A. 1,72:1
B. 2,61:1
C. 1,94: 1
D. 1,26:1
E. 1.31:1

Transcribed Image Text:The following information is extracted from the accounting records of Wango Ltd:
2021
2020
R R
Share capital: Ordinary
shares
82 000 114 000
Sales
100 000 120 000
Interest expense
2 000
3 000
Dividends
4 000
4 500
Profit before tax
42 000
49 000
Income tax expense
Retained earnings
16 000
18 000
48 500
23 500
Revaluation surplus
10 000
7 000
Current assets
71 000
80 000
Total assets
145 000 172 000
Current liabilities
27 200
26 300
Inventory
36 600
24 300
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