Question: X Question 3 (1) The equation for calculating Current Ratio is: Current Assets/ Current Liabilities. The most common current assets are: cash, accounts receivables, inventory,

X Question 3 (1) The equation for calculating Current Ratio is: Current Assets/ Current Liabilities. The most common current assets are: cash, accounts receivables, inventory, short-term investments, and prepaid expenses. However, in computing current assets prepaid expenses are usually left out, why? (2) The equation for computing Quick Ratio is: Quick Assets/ Current Liabilities. Which of the current assets noted in (1) above are not included in the calculation of quick assets, and why? (3) Assume that ABC Company has the following current assets and current liabilities: Cash-$50,000, Accounts Receivables= $40,000. Inventory-$75,000. Short-term investments- $20,000. Prepaid expenses $80,000. Current Liability = 97,000. Please show calculations for the following: (a) Current Ratio (b) Quick Ratio (c) Bases on the calculations in (a) and (b) what can you conclude about ABC Company? Use the editor to format your

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