Pioneer\'s adjusted trial balance as of December 31, 2018 is given below: Debit
ID: 2410060 • Letter: P
Question
Pioneer's adjusted trial balance as of December 31, 2018 is given below:
Debit
Credit
Cash
$13,000
Accounts Receivable
8,000
Prepaid Rent
7,000
Prepaid Insurance
2,100
Office Supplies
3,300
Land
45,000
Building
57,000
Depreciationlong dash—Building
$12,000
Equipment
32,000
Depreciationlong dash—Equipment
7,500
Accounts Payable
5,500
Salaries Payable
4,500
Interest Payable
2,000
Mortgage Payable (long term)
5,000
Common Stock
14,000
Dividends
5,500
Service Revenue
229,500
Salaries Expense
46,500
Insurance Expense
3,000
Rent Expense
12,500
Utilities Expense
15,500
Advertising Expense
9,700
Expenselong dash—Building
10,900
Expenselong dash—Equipment
7,900
Supplies Expense
1,100
?????????????????
Total
$280,000
$280,000
Compute the current ratio. (Round your answer to two decimal places.)
A.
8.16
B.
2.78
C.
2.36
D.
1.75
Debit
Credit
Cash
$13,000
Accounts Receivable
8,000
Prepaid Rent
7,000
Prepaid Insurance
2,100
Office Supplies
3,300
Land
45,000
Building
57,000
AccumulatedDepreciationlong dash—Building
$12,000
Equipment
32,000
AccumulatedDepreciationlong dash—Equipment
7,500
Accounts Payable
5,500
Salaries Payable
4,500
Interest Payable
2,000
Mortgage Payable (long term)
5,000
Common Stock
14,000
Dividends
5,500
Service Revenue
229,500
Salaries Expense
46,500
Insurance Expense
3,000
Rent Expense
12,500
Utilities Expense
15,500
Advertising Expense
9,700
DepreciationExpenselong dash—Building
10,900
DepreciationExpenselong dash—Equipment
7,900
Supplies Expense
1,100
?????????????????
Total
$280,000
$280,000
Explanation / Answer
Current ratio = Current assets/Current liabilities
Current assets = 13000+8000+7000+2100+3300 = 33400
Current liabilities = 5500+4500+2000 = 12000
Current ratio = 33400/12000 = 2.78
So answer is b) 2.78