Smith Company Has the Following Account Balances Calculate Smith Company's Current Ratio

Smith Company has the following account balances: $\begin{array} { | l | r | } \hline \text { Cash } & \$ 100,000 \\\hline \text { Accounts Receivable } & 30,000 \\\hline \text { Merchandise Inventory } & 250,000 \\\hline \text { Equipment } & 400,000 \\\hline \text { Accounts Payable } & 50,000 \\\hline \text { Bonds Payable } & 300,000 \\\hline\end{array}$ Calculate Smith Company's current ratio.

A) 8.0:1
B) 7.6:1
C) 2.2:
D) 1.1:

Correct Answer:

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