Explanation Current ratio: Current ratio is one of the liquidity ratios , which measures the capacity of the company to meet its short-term obligations using its current assets. Current ratio is calculated by using the formula: Current ratio = Current Assets Current Liabilities Compute the current ratio as on December 31, 2012 for Corporation W. Particulars 2012 Short term investments $1,900 Cash $1,850 Accounts receivable $185 Supplies $110 Prepaid insurance $675 Current assets (A)

3rd Edition

ISBN: 9780133791129

Author: Jane L. Reimers

Publisher: Pearson Higher Ed

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Chapter 2, Problem 27EA

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Determine the current ratio as on December 31, 2012 for Corporation W.

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Determine the current ratio as on December 31, 2012 for Corporation W.

Solution Summary: The author explains the current ratio of Corporation W, which measures the company's ability to meet its short-term obligations using its current assets.

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