The financial statements for silver service company include the following items: 2019 2018 cash $50,500 $42,000 short-term investments 26,000 14,500 net accounts receivable 52,000 48,000 merchandise inventory 131,000 51,000 total assets 532,000 548,000 accounts payable 132,500 127,000 salaries payable 16,000 16,000 long-term note payable 57,000 57,000 compute the acid-test ratio for 2018.

0.73 times

Explanation:

The computation of the acid test ratio for 2018 is shown below:

Acid-test ratio = Quick assets ÷ total current liabilities  

where,  

Quick assets = Cash + short-term investments + Accounts receivable (net)  

= $42,000 + $14,500 + $48,000

= $104,500

And, the current liabilities would be

= Accounts Payable + Salaries payable

= $127,000 + $16,000

= $143,000

Now put these values to the above formula  

So, the value would equal to

= $104,500 ÷ $143,000

= 0.73 times

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