# Data from Fontecchio Corporation’s most recent balance sheet appear below: Cash $51,000 Marketable securities$ 52,000 Accounts receivable

Data from Fontecchio Corporation's most recent balance sheet appear below: Cash $51,000 Marketable securities$ 52,000 Accounts receivable $11,800 Inventory$ 88,000 Prepaid expenses $46,000 Current liabilities$ 328,000 The corporation's acid-test ratio is closest to:

0.35

Explanation:

Calculation to determine what The corporation's acid-test ratio is closest to:

First step is to calculate the Quick assets

Using this formula

Quick assets = Cash + Marketable securities + Accounts receivable + Short-term notes receivable

Let plug in the formula

Quick assets= $51,000 +$52,000 + $11,800 +$0

Quick assets= $114,800 Now let calculate the Acid-test ratio Using this formula Acid-test ratio = Quick assets ÷ Current liabilities Let plug in the formula Acid-test ratio =$114,800 ÷ \$ 328,000

Acid-test ratio = 0.35

Therefore The corporation's acid-test ratio is closest to:0.35

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