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18 January, 13:56

All Wet Water Softener Systems has Cash of $400?, Accounts Receivable of $1,000?, and Office Supplies of $600. All Wet owes $300 on Accounts Payable and has Salaries Payable of $100. All Wet?'s current ratio is

A. 2.00

B. 0.20

C. 0.71

D. 5.00

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Answers (1)
  1. 18 January, 15:41
    0
    D. 5.00

    Explanation:

    The calculation of current ratio is given below : -

    Current Ratio = Current Assets : Current Liabilities

    where,

    Current Asset = cash + account receivable + office supply

    = $400 + $1000 + $600

    = $2,000

    and the Current Liabilities is

    = Account payable + salary payable

    = $300 + $100

    = $400

    So, the current ratio is

    = $2,000 : $400

    = 5 times
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