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Camaro GTO Torino Cash $ 2,300 $ 210 $1,20e Short-term investments 500 Current receivables 240 490 400 2,125 1,980 Inventory Prepaid expenses 2,950 300 600 900 $ 4,965 $ 5,950 $ 2,180 $1,300 $3,450 Total current assets $ 3,280 Current liabilities a. Compute the acid-test ratio for each of the following separate cases. b. Which company is in the best position to meet short-term obligations? Complete this question by entering your answers in the tabs below. Required A Required B Compute the acid-test ratio for each of the following separate cases. Acid-Test Ratio Acid-Test Choose Numerator: Choose Denominator: Ratio Quick assets Current liabilities Acid-test ratio Camaro GTO Torino 2,840 8/ 1,300 8I 3,000 8I 2,180 1.30 to 1 = 1,300 1.00 to 1 3.450 0.87 to 1 %3D %24 %24 %24 %24

Camaro GTO Torino Cash $ 2,300 $ 210 $1,20e Short-term investments 500 Current receivables 240 490 400 2,125 1,980 Inventory Prepaid expenses 2,950 300 600 900 $ 4,965 $ 5,950 $ 2,180 $1,300 $3,450 Total current assets $ 3,280 Current liabilities a. Compute the acid-test ratio for each of the following separate cases. b. Which company is in the best position to meet short-term obligations? Complete this question by entering your answers in the tabs below. Required A Required B Compute the acid-test ratio for each of the following separate cases. Acid-Test Ratio Acid-Test Choose Numerator: Choose Denominator: Ratio Quick assets Current liabilities Acid-test ratio Camaro GTO Torino 2,840 8/ 1,300 8I 3,000 8I 2,180 1.30 to 1 = 1,300 1.00 to 1 3.450 0.87 to 1 %3D %24 %24 %24 %24

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The image presents financial data for three companies: Camaro, GTO, and Torino, along with a task to compute the acid-test ratio and determine which company is best positioned to meet short-term obligations. ### Financial Data Table - **Camaro:** - **Cash:** $2,300 - **Short-term investments:** $0 - **Current receivables:** $240 - **Inventory:** $2,125 - **Prepaid expenses:** $300 - **Total current assets:** $4,965 - **Current liabilities:** $2,180 - **GTO:** - **Cash:** $210 - **Short-term investments:** $0 - **Current receivables:** $490 - **Inventory:** $1,980 - **Prepaid expenses:** $600 - **Total current assets:** $3,280 - **Current liabilities:** $1,300 - **Torino:** - **Cash:** $1,200 - **Short-term investments:** $500 - **Current receivables:** $400 - **Inventory:** $2,950 - **Prepaid expenses:** $900 - **Total current assets:** $5,950 - **Current liabilities:** $3,450 ### Instructions a. **Compute the acid-test ratio for each case.** b. **Determine which company is best positioned to meet short-term obligations.** ### Acid-Test Ratio Calculation A detailed table is provided for computing the acid-test ratio: - **Camaro:** - **Quick assets:** $2,840 - **Current liabilities:** $2,180 - **Acid-test ratio:** 1.30 to 1 - **GTO:** - **Quick assets:** $1,300 - **Current liabilities:** $1,300 - **Acid-test ratio:** 1.00 to 1 - **Torino:** - **Quick assets:** $3,000 - **Current liabilities:** $3,450 - **Acid-test ratio:** 0.87 to 1 **Explanation of Quick Assets:** Quick assets are calculated by adding cash, short-term investments, and current receivables. **Conclusion:** The acid-test ratio is
Transcribed Image Text:The image presents financial data for three companies: Camaro, GTO, and Torino, along with a task to compute the acid-test ratio and determine which company is best positioned to meet short-term obligations. ### Financial Data Table - **Camaro:** - **Cash:** $2,300 - **Short-term investments:** $0 - **Current receivables:** $240 - **Inventory:** $2,125 - **Prepaid expenses:** $300 - **Total current assets:** $4,965 - **Current liabilities:** $2,180 - **GTO:** - **Cash:** $210 - **Short-term investments:** $0 - **Current receivables:** $490 - **Inventory:** $1,980 - **Prepaid expenses:** $600 - **Total current assets:** $3,280 - **Current liabilities:** $1,300 - **Torino:** - **Cash:** $1,200 - **Short-term investments:** $500 - **Current receivables:** $400 - **Inventory:** $2,950 - **Prepaid expenses:** $900 - **Total current assets:** $5,950 - **Current liabilities:** $3,450 ### Instructions a. **Compute the acid-test ratio for each case.** b. **Determine which company is best positioned to meet short-term obligations.** ### Acid-Test Ratio Calculation A detailed table is provided for computing the acid-test ratio: - **Camaro:** - **Quick assets:** $2,840 - **Current liabilities:** $2,180 - **Acid-test ratio:** 1.30 to 1 - **GTO:** - **Quick assets:** $1,300 - **Current liabilities:** $1,300 - **Acid-test ratio:** 1.00 to 1 - **Torino:** - **Quick assets:** $3,000 - **Current liabilities:** $3,450 - **Acid-test ratio:** 0.87 to 1 **Explanation of Quick Assets:** Quick assets are calculated by adding cash, short-term investments, and current receivables. **Conclusion:** The acid-test ratio is
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