Determine the amount of current liabilities?
Super Savers Department Store reported a quick ratio of 0.6. A review of its balance sheet revealed the following information:
Quick assets …………. $120,000
Current assets ………… 750,000
Noncurrent assets …….. 450,000
Noncurrent liabilities …. 300,000
Determine the amount of current liabilities reported in the balance sheet.
- 9 years agoFavorite Answer
The formula for quick ratio is: Quick Assets (Current Assets - Inventory Assets)/Current Liabilities
Therefore, 0.6=120 000/Current Liabilities
If we rearrange the formula we obtain: Current Liabilities= 120 000/0.6
Current Liabilities = $200 000
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