Refer to the following selected financial information from Texas Electronics. Compute the company's acid-test ratio for Year 2.  Year 2 Year 1Cash$37,500 $36,850 Short-term investments 90,000  90,000 Accounts receivable, net 85,500  86,250 Merchandise inventory 121,000  117,000 Prepaid expenses 12,100  13,500 Plant assets 388,000  392,000 Accounts payable 113,400  111,750 Net sales 711,000  706,000 Cost of goods sold 390,000  385,500 

A. 3.05.
B. 2.26.
C. 1.98.
D. 2.95.
E. 1.88.


Answer: E

Business

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