Question

The following is a December 31, 2021, post-closing trial balance for Culver City Lighting, Inc. Account Title Debits Credits Cash $ 59,000 Accounts receivable 43,000 Inventory 49,000 Prepaid insurance 19,000 Equipment 110,000 Accumulated depreciation $ 38,000 Patent (net) 44,000 Accounts payable 14,000 Interest payable 4,000 Notes payable (due in 10 years) 140,000 Common stock 74,000 Retained earnings 54,000 Totals $ 324,000 $ 324,000

a. Calculate the current ratio.

b. Calculate the acid-test ratio.

c. Calculate the debt to equity ratio.

This is what the question is asking for

Current Ratio Numerator==Denominator

Acid-Test Ratio Numerator==Denominator

Debt to Equity RatioNumerator==Denominator

Answer 1

Current Assets	($)	Current Liabilities	($)
Cash	59,000	Accounts Payable	14,000
Accounts Receivables	43,000	Interest Payable	4,000
Inventory	49,000
Prepaid Insurance	19,000
Current Assets	170,000	Current Liabilities	18,000

Current Ratio:

Numerator	Current Assets	170,000	9.44
Denominator	Current Liabilities	18,000

Acid-Test Ratio:

Numerator	Quick Assets	102,000	5.67
Denominator	Current Liabilities	18,000

Debt to Equity Ratio:

Numerator	Debt (Total Liabilities)	158,000	1.23
Denominator	Equity	128,000

Debt	($)	Equity	($)
Accounts Payable	14,000	Common Stock	74,000
Interest Payable	4,000	Retained Earnings	54,000
Notes Payable	140,000
Debt	158,000	Equity	128,000