Stimac Corporation has total cash of 215000 no marketable se

Stimac Corporation has total cash of $215,000, no marketable securities, total current receivables of $286,000, total inventory of $153,000, total prepaid expenses of $54,000, total current assets of $708,000, total current liabilities of $264,000, total stockholders\' equity of $1.114,000, total assets of $1,565,000, and total liabilities of $451,000. The company\'s acid-test (quick) ratio is closest to: 03:0300 Multiple Choice 2.10 1.75 2.68 1.90

Solution

Current assets = $708,000

Quick Assets

= Current Assets – Inventory – Prepaid Expenses

= $708,000 - $153,000 - $54,000

= $ 501,000

Current Liabilities = $264,000

So, Quick Ratio / acid-test ratio

= Quick Assets / Current Liabilities

= $ 501,000 / $264,000

= 1.90

So, as per above calculations, option D is the correct option