Ask Question
8 July, 05:40

Cherry Tree Company has the following balance sheet information as of December 31, 2019Cash $10,000Marketable Securities $20,000Accounts Receivable $30,500Prepaid Expenses $2,000Inventory $34,000Property, Plant and Equipment (net of Accumulated Depreciation) $54,000Accounts Payable $45,000Long-term Bonds Payable $50,000Owner's Equity $55,500What is Cherry Tree Company's current ratio?

+1
Answers (1)
  1. 8 July, 09:12
    0
    2.14 times

    Explanation:

    The computation of the current ratio is shown below:

    Current ratio = Current assets : Current liabilities

    where,

    Current assets is

    = Cash + marketable securities + account receivable + prepaid expense + inventory

    = $10,000 + $20,000 + $30,500 + $2,000 + $34,000

    = $96,500

    And, the current liabilities is account payable i. e $45,000

    So, the current ratio is

    = $96,500 : $45,000

    = 2.14 times

    We simply applied the above formula
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Cherry Tree Company has the following balance sheet information as of December 31, 2019Cash $10,000Marketable Securities $20,000Accounts ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers