Accounts payable Cash 32000 46000 Accounts receivable net

$ Accounts payable Cash $ 32,000 46,000 Accounts receivable, net: 27,000 December 31, 2016 December 31, 2015 25,000 Cost of goods sold 19,000 Short-term investments Inventory: 20,000 95,000 December 31, 2016 December 31, 2015 Net credit sales 240,000 Other current assets 12,000 2,500 18,500 Long-term assets 44,000 Other current liabilities Long-term liabilities 8,000

Solution

Current Ratio = Current Assets / Current Liabilities

1. Current Assets = Accounts Receivable + Inventory + Cash + Other Current Assets + Short Term Investments

Current Assets = $32000 + $25000 + $27000 + $2500 + $12000

Current Assets = $98500

2. Current Liabilities = Accounts Payable + Other Current Liabilities

Current Liabilities = $46000 + $18500

Current Liabilities = $64500

3. Current Ratio = $98500 / $64500

Current Ratio = $98500 / $64500 = 1.53