Wanda co. had total assets of $35,000, which included cash of $20,000, accounts receivable of $5,000 merchandise inventory of $10,000. wanda also had total liabilities of $95,000, which included current liabilities of $20,000. wanda's acid-test ratio equals .

1.25 times

Explanation:

The computation of the acid test ratio is shown below:

Acid test ratio = Quick assets ÷ total current liabilities  

where,  

Quick assets = Cash balance + Accounts Receivable

                     = $20,000 + $5,000

                     = $25,000

And, the current liabilities is $20,000

Now place these values in the formula above. So the ratio would be equal to

= $25,000 ÷ $20,000

= 1.25 times