None Dartmouth Company has a quick ratio of 2.5to 1. It has current liabilities of $40,000 andnoncurrent assets of $70,000. If Dartmouth'scurrent ratio is 3.1 to 1, its inventory andprepaid expenses must be:a. $12,400.b.$30,000.c.$40,000.d.$24,000.

Step 1: To solve the problem, we need to use the following formulas:Current Ratio Formula:Current…

Answered: Dartmouth Company has a quick ratio of…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 6MCQ

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Dartmouth Company has a quick ratio of 2.5 to 1. It has current liabilities of $40,000 and noncurrent assets of $70,000. If Dartmouth's current ratio is 3.1 to 1, its inventory and prepaid expenses must be: a. $12,400. b.$30,000. c.$40,000. d.$24,000.