Question

Calculate the current ratio and the quick ratio for the following partial financial statement for Tootsie Roll. (Round your answers to the nearest hundredth.)

Assets				Liabilities
Current assets:				Current liabilities:
Cash and cash equivalents (Note 1)	$	4,144,190		Notes payable to banks	$	752,221
Investments (Note 1)		32,453,769		Accounts payable		7,084,075
Accounts receivable, less allowances of $740,000 and $736,000		16,126,648		Dividends payable		656,607
Inventories (Note 1):				Accrued liabilities (Note 5)		9,906,534
Finished goods and work in progress		12,570,955		Income taxes payable		4,551,429
Raw materials and supplies		10,195,858
Prepaid expenses		1,957,710

Current ratio
Quick ratio

Answer 1

Current Asset= Total of Current Asset = 4,144,190+32,453,769+16,126,648+12,570,955+10,195,858+1,957,710=$77,449,130

Current Liability= 752,221+7,084,075+656,607+9,906,534+4,551,429 = $22,950,866

Quick Asset = Current Asset – Inventory- Prepaid Expens = 77,449,130-12,570,955-10,195,858-1,957,710 = $52,724,607