QuestionJune 3, 2025

A corporation has current assets of 3,203,000 current liabilities of 2,150,000 total assets of 10,000,000 and total liabilities of 6,000,000 If it pays 200,000 of its accounts payable what will its current ratio be? (rounded) 1.48 1.40 1.54 1.51 1.44

A corporation has current assets of 3,203,000 current liabilities of 2,150,000 total assets of 10,000,000 and total liabilities of 6,000,000 If it pays 200,000 of its accounts payable what will its current ratio be? (rounded) 1.48 1.40 1.54 1.51 1.44
A corporation has current assets of 3,203,000 current liabilities of 2,150,000 total assets
of 10,000,000 and total liabilities of 6,000,000 If it pays 200,000 of its accounts payable
what will its current ratio be? (rounded)
1.48
1.40
1.54
1.51
1.44

Solution
4.5(339 votes)

Answer

1.64 Explanation 1. Calculate New Current Liabilities Subtract the payment from current liabilities: 2,150,000 - 200,000 = 1,950,000. 2. Calculate Current Ratio Use the formula **Current Ratio = \frac{\text{Current Assets}}{\text{Current Liabilities}}**. Substitute the values: \frac{3,203,000}{1,950,000}. 3. Compute the Result Perform the division: \frac{3,203,000}{1,950,000} \approx 1.64.

Explanation

1. Calculate New Current Liabilities<br /> Subtract the payment from current liabilities: $2,150,000 - 200,000 = 1,950,000$.<br /><br />2. Calculate Current Ratio<br /> Use the formula **Current Ratio = \frac{\text{Current Assets}}{\text{Current Liabilities}}**. Substitute the values: $\frac{3,203,000}{1,950,000}$.<br /><br />3. Compute the Result<br /> Perform the division: $\frac{3,203,000}{1,950,000} \approx 1.64$.
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