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If a company has a quick ratio of 1.25 times, current assets of $25,000 and inventory of $5,000, the current liabilities balance is equal to sign and comma, as applicable) (round to the nearest dollar and include the dollar

Answer :

Abiolataiwo2015go

Answer:

$16,000

Explanation:

Calculation to determine what the current liabilities balance is equal to

Using this formula

Quick Ratio = Current Assets - Inventory / Current Liabilities

Let plug in the formula

1.25 = ($25,000 - $5000) / Current Liabilities

1.25Current Liabilities = ($25,000 - $5000)

Current Liabilities = $20,000 / 1.25

Current Liabilities =$16,000

Therefore the current liabilities balance is equal to $16,000

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