2A2B DEDHAM CORPORATION HAS DECIDED TO INCLUDE CERTAIN FINANCIAL RATI...

35.

CSO: 2A2a

LOS: 2A2b

Dedham Corporation has decided to include certain financial ratios in its year-end annual

report to shareholders. Selected information relating to its most recent fiscal year is

provided below.

• Cash

$10,000

• Accounts receivable

20,000

• Prepaid expenses

8,000

• Inventory

30,000

• Available-for-sale securities

-At cost

9,000

-Fair value at year end

12,000

• Accounts payable

15,000

• Notes payable (due in 90 days)

25,000

• Bonds payable (due in 10 years)

35,000

Dedham’s quick (acid-test) ratio at year end is

a.

2.00 to 1.

b.

1.925 to 1.

c.

1.80 to 1.

d.

1.05 to 1.