LO 5.3 If current assets are $112,000 and current liabilities are $56,000, what is the current ratio?Choose one answer from the options below.A. 200 percentB. 50 percentC. 2.0D. $50,000
Question
LO 5.3 If current assets are 56,000, what is the current ratio?Choose one answer from the options below.A. 200 percentB. 50 percentC. 2.0D. $50,000
Solution
The current ratio is calculated by dividing current assets by current liabilities.
Step 1: Identify the current assets and current liabilities. From the question, current assets are 56,000.
Step 2: Divide the current assets by the current liabilities.
56,000 = 2.0
So, the current ratio is 2.0. The correct answer is C. 2.0.
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