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How to compute the acid-test ratio for the year

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Reference no: EM132598218

Simon Company's year-end balance sheets follow.

At December 31                             2017              2016             2015

Assets

Cash                                              $24,444         $29,751    $30,997

Accounts receivable, net                    73,037            51,033      40,089

Merchandise inventory                       90,912              69,480     44,905

Prepaid expenses                         8,034                     7,578            3,479

Plant assets, net                        230,692                    210,364        193,630

Total assets                                 $427,119                 $368,206        $313,100

Liabilities and Equity Accounts payable $106,353           $60,360          $42,569

Long-term notes payable secured by

mortgages on plant assets                    81,101                 87,228              70,579

Common stock, $10 par value           162,500                     162,500             162,500

Retained earnings                           77,165                      58,118                37,452

Total liabilities and equity                   $427,119               $368,206              $313,100

Question 1. Compute the current ratio for the year ended 2017, 2016, and 2015.

Question 2. Compute the acid-test ratio for the year ended 2017, 2016, and 2015.

Reference no: EM132598218

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