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19 July, 04:38

At year-end, Stick Company has cash of $ 15 comma 000 , current accounts receivable of $ 30 comma 000 , merchandise inventory of $ 40 comma 200 , and prepaid expenses totaling $ 5 comma 900. Liabilities of $ 60 comma 000 must be paid next year. What is Stick's acid-test ratio?

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  1. 19 July, 07:01
    0
    0.75 times

    Explanation:

    The computation of the acid test ratio is shown below:

    Quick ratio = Quick assets : total current liabilities

    where,

    Quick assets = Account receivable + cash balance

    = $30,000 + $15,000

    = $45,000

    And, the current liabilities is $60,000

    Now put these values to the above formula

    So, the value would equal to

    = $45,000 : $60,000

    = 0.75 times
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