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The acid-test ratio is (Round your answer to 2 decimal places.):

The acid-test ratio is (Round your answer to 2 decimal places.):

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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Paragraph Font The acid-test ratio is (Round your answer to 2 decimal places.): Multiple Choice 0.25. 0.88. 1,17. 1.58 127 127
Transcribed Image Text:Paragraph Font The acid-test ratio is (Round your answer to 2 decimal places.): Multiple Choice 0.25. 0.88. 1,17. 1.58 127 127
Paragraph Font The following partial balance sheet ($ in thousands) for Paisano Seafood Inc. is shown below. Liabilities and Equity Assets Current assets: Current liabilities: $ 60 Accounts payable $240 Cash 80 Accounts receivable (net) 170 Other current liabilities 320 Notes receivable 50 Total current liabilities 110 Long-term liabilities Total liabilities 200 Inventory Prepaid expenses 25 430 Total current assets 505 Shareholders' equity: Equipment (net) 255 Common stock 150 180 Retained earnings Total shareholders' equity 330 Total assets $760 Total liabilities and equity $760
Transcribed Image Text:Paragraph Font The following partial balance sheet ($ in thousands) for Paisano Seafood Inc. is shown below. Liabilities and Equity Assets Current assets: Current liabilities: $ 60 Accounts payable $240 Cash 80 Accounts receivable (net) 170 Other current liabilities 320 Notes receivable 50 Total current liabilities 110 Long-term liabilities Total liabilities 200 Inventory Prepaid expenses 25 430 Total current assets 505 Shareholders' equity: Equipment (net) 255 Common stock 150 180 Retained earnings Total shareholders' equity 330 Total assets $760 Total liabilities and equity $760
Expert Solution
Liquid assets

All current assets are liquid assets except Inventory and prepaid expenses. These are excluded from liquid assets as these can not be converted into cash within a few days . 

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