The financial data below for Billingsley Enterprises in 2020. (hints: Internet Resources, Discussion Board)
Category Dollar Amount
Cash $400,000
Accounts receivable 700,000
Inventories 840,000
Prepaid expenses 24,000
Accounts payable 1,300,000
Long-term liabilities 360,000
1. Determine the working capital for the company.
A. $400,000 B. $280,000 C. $190,000 D. $640,000
2. Compute the current ratio from the financial data provided.
A. 0.97 B. 1.49 C.0.86 D. 1.17
3. What is the acid-test ratio for the company in 2020?
A. 0.66 B. 0.88 C. 0.99 D. 0.85