Answer:
Explanation:
Current Assets are those asset which will be liquidated within next one year.
cash and marketable securities $360,000
accounts receivable $1,280,000
inventory $2,180,000
Total Current Assets $3,820,000
Current Liabilities are those which is payable within next one year.
accrued wages and taxes $540,000
accounts payable $840,000
notes payable $680,000
Total Current Liabilities $2,060,000
Current ratio measures the capability of a business to pay the current liabilities if it becomes due.
Current Ratio = Current Assets / Current Liabilities = $3,820,000 / $2,060,000 = 1.85 times
