Chen Company has current assets equal to $5,000,000. Of these, $1,000,000 is cash, $2,250,000 is accounts receivable,

Question:

Chen Company has current assets equal to $5,000,000. Of these, $1,000,000 is cash, $2,250,000 is accounts receivable, $500,000 is inventory, and the remainder is marketable securities. Current liabilities total $4,000,000.

Required:

1. Calculate the current ratio.

2. Calculate the quick ratio (acid-test ratio).

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Related Book For answer-question

Cornerstones of Managerial Accounting

ISBN: 978-1305103962

6th edition

Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

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Question Posted: Aug 25, 2016 08:25 AM

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Chen Company has current assets equal to $5,000,000. Of these, $1,000,000 is cash, $2,250,000 is accounts receivable,

Question:

Step by Step Answer:

1 2 You first need to calculate marketable securities by subtracting ...View the full answer

Cornerstones of Managerial Accounting

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