Question

Use the information below for Harding Company to answer the question that follow. Harding Company Accounts payable $ 40,000 Accounts receivable 65,000 Accrued liabilities 7,000 Cash 30,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 110,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 30,000 Property, plant, and equipment 625,000 Prepaid expenses 2,000 Based on the data for Harding Company, what is the quick ratio, rounded to one decimal point? a. 1.7 b. 2.7 c. 2.6 d. 0.9

Answer 1

Correct Option A i.e. 1.7
Quick ratio = Current assets(except inventory and prepaid exp) / current labilities
=131000 / 77000
1.7
Current assets(except inventory and prepaid exp)
Accounts receivable	65,000
Cash	30,000
Marketable securities	36,000
Total	131,000
Current Liabilities
Accounts payable	40,000
Accrued liabilities	7,000
Notes payable (short-term)	30,000
Total	77,000