Ellison Electronics has Cash of 200 Accounts Receivable of 8

Ellison Electronics has Cash of $200, Accounts Receivable of $800, Supplies of $400, Supplies Expense of $200, and Service Revenue of $900. Ellison owes $300 on Accounts Payable, $500 on Salary Payable, and $700 on Long-term Note Payable. What is Ellison\'s current ratio (rounded to two decimal places)? 10. A 3.13 B. 1.75 C. 1.60 D. 0.93 nswer Key to Ten-Minute Quiz:

Solution

Answer- B. 1.75

Current Ratio =	Current assets
Current liabilities
=	1,400/800
=	1.75
Current assets
cash	$200.00
Accounts receivable	$800.00
supplies	$400.00
Total current assets	$1,400.00
Current liabilities
Accounts payable	$300.00
salary payable	$500.00
Total current assets	$800.00