Chapter 9, Problem 9QC

At year-end, Schultz Company has cash of $11,600, current accounts receivable of $48,900, merchandise inventory of $37,900, and prepaid expenses totaling $5,100. Liabilities of $55,900 must be paid next year. What is Schultz’s acid-test ratio?

Learning Objective 5

1. 1.08
2. 0.21
3. 1.76
4. Cannot be determined from the data given