question archive The Falmouth Corporation has current assets of $200,000
The Falmouth Corporation has current assets of $200,000
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The Falmouth Corporation has current assets of $200,000. If the current ratio is 2.5 and the quick ratio is 1.50, what is the value of the inventory?
A.104,000
B.96,000
C.88,000
D.80,000
E.72,000
F.64,000
G.56,000
H.48,000
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Answer:
D. 80,000
Current liabilities = $200,000 / 2.50 = $80,000
Quick assets = $80,000 * 1.5 = $120,000
Value of inventory = Current assets - Quick assets
= $200,000 - $120,000
= $80,000
