The following data is provided. At December 31, 2015, the acid-test ratio was 20

Question

The following data is provided. At December 31, 2015, the acid-test ratio was 2014 Cash Accounts receivable (net) Inventories Plant assets (net) Accounts payable Income taxes payable Bonds payable 10% Preferred stock. SSO par Common stock, s10 par Paid-in capital in excess of par Retained earnings Net credit sales Cost of goods sold Operating expenses Net income $500,000 600,000 1,300,000 1100,000 3,500,0003,250,000 400,000 50,000 700,000 1,000,000 900,000 650,000 $750,000 800,000 550,000 100,000 700,000 1,000,000 1,200,000 000,000 2,000,000 6,400,000 4,200,000 1,450,000 750,000 Depreciation included in cost of goods sold and operating expenses is $610,000. On May 1, 2015, 30,000 shares of common stock were ssued. The preferred stock is cumulative. The preferred dividends were not declared during 2015 Minimized View 1,550 1,080 2,100-800. 2,850 +650. 1. 550 650 . 5341 ch ] al

Explanation / Answer

acid test ratio=(Cash+Acc rec)/(Accpayable+Income tax payable)
=(750000+800000)/(550000+100000)
since the options provided in '000s it is
=1550/650
it is option D

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