Question

Use the information below for Harding Company to answer the question that follow. Harding Company Accounts payable $31,404 Accounts receivable 72,976 Accrued liabilities 6,860 Cash 22,482 Intangible assets 35,396 Inventory 85,340 Long-term investments 119,409 Long-term liabilities 77,647 Marketable securities 37,628 Notes payable (short-term) 27,112 Property, plant, and equipment 640,352 Prepaid expenses 2,086 Based on the data for Harding Company, what is the quick ratio, rounded to one decimal point

Answer 1

Answer:

Harding Company

The quick ratio is:

= 2.1

Explanation:

a) Data and Calculations:

Accounts payable $31,404

Accounts receivable 72,976

Accrued liabilities 6,860

Cash 22,482

Intangible assets 35,396

Inventory 85,340

Long-term investments 119,409

Long-term liabilities 77,647

Marketable securities 37,628

Notes payable (short-term) 27,112

Property, plant, and equipment 640,352

Prepaid expenses 2,086

Current Assets:

Cash                                22,482

Accounts receivable       72,976

Marketable securities    37,628

Prepaid expenses           2,086

Inventory                       85,340

Total current assets $220,512

Current Liabilities:

Accounts payable             $31,404

Accrued liabilities                 6,860

Notes payable (short-term) 27,112

Total current liabilities     $65,376

Current assets - inventory = $135,172 ($220,512 - 85,340)

Quick ratio = (Current assets - inventory)/Current liabilities

= $135,172 ($220,512 - 85,340)/$65,376

= 2.1