Solution-Determine the acid-test ratio

Determine the acid-test ratio

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Question - The following data are provided:

	December 31
	2018	2017
Cash	$1450000	$1005000
Accounts receivable (net)	1800000	1150000
Inventories	2550000	2300000
Plant assets (net)	6500000	6450000
Accounts payable	1150000	800000
Income taxes payable	180000	100000
Bonds payable	1400000	1400000
10% Preferred stock, $50 par	2000000	2000000
Common stock, $10 par	2450000	1850000
Paid-in capital in excess of par	1650000	1300000
Retained earnings	3850000	3600000
Net credit sales	12850000
Cost of goods sold	8500000
Operating expenses	3100000
Net income	1450000

Additional information: Depreciation included in cost of goods sold and operating expenses is $1230000. On May 1, 2018, 60000 shares of common stock were issued. The preferred stock is cumulative. The preferred dividends were not declared during 2018.

Required - At December 31, 2018, determine the acid-test ratio?

Reference no: EM132488649

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Determine the acid-test ratio

Reference no: EM132488649

Reference no: EM132488649

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