What is ratio of current assets divided by current liability

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Revenue Recognition: Bally Total Fitness Holdings - Bally Total Fitness is one of the leading owners and operators of health clubs in the world. When a customer signs up for a health club membership, she/he agrees to an upfront initiation fee (to start the membership) as well as additional monthly payments for the right to use the health club. Using their balance sheet (and an extract from one of their footnotes)

Question 1: What is the ratio of current assets divided by current liabilities (current ratio) for Bally as of December 31st of Year 2?

Question 2: Should the $282,806 short-term deferred revenue only be subtracted from total current liabilities (resulting in current ratio of 2.55) or also added to total current assets (resulting in current ratio of 5.45), and why?

Reference no: EM132630609

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