At the end of 2012, Delaney Company had a current ratio of 1.87, a quick ratio of 1.31, and working capital of $45,000. Its current assets consisted of cash, accounts receivable, and merchandise inventory.

Calculate the amount of Delaney's current liabilities (rounded to 0 decimals):

Question

At the end of 2012, Delaney Company had a current ratio of 1.87, a quick ratio of 1.31, and working capital of $45,000. Its current assets consisted of cash, accounts receivable, and merchandise inventory.

Calculate the amount of Delaney's current liabilities (rounded to 0 decimals):

BlackTom AI · Accepted Answer

To tackle the problem, I’ll extract the key relationships given and translate them into algebraic equations that connect current assets (CA), current liabilities (CL), and inventory (Inv).
Option-by-option analysis:
Option 1: $64,237
This would imply a certain CL value via CA/CL = 1.87, but we don’t yet know CA. Using the working capital constraint CA − CL = 45,000 gives CA = CL + 45,000. Substituting into CA/CL = 1.87 yields (CL + 45,000)/CL = 1.87, which would lead to CL ≈ 30,284. Then the quick ratio would require (CA − Inv)/CL = 1.31, i.e., (CA − Inv) = 1.31 CL. With CA ≈ 75,284, this would imply Inv ≈ 75,284 − 1.31×30,284 ≈ −? (negative), which is inconsistent with Inv being a positive asset. Therefore this option is not compatible with the given data.
Option 2: $96,724
If CL were around 96,724, then CA = 1.87 × CL ≈ 180,000, andInv would be CA − quick assets. The quick ratio condition (CA − Inv)/CL = 1.31 would force Inv to be CA − 1.31 CL ≈ 180,000 − 126,  a mismatch arises because working capital would be CA − CL ≈ 83,276, which does not match the given 45,000. The numbers don’t align with all three relationships, so this is not viable.
Option 3: $97,240
Similar to Option 2, plugging CL ≈ 97,240 into CA = 1.87 CL gives CA ≈ 181,  maybe around 182, 000. The Inv from CA − Inv = 1.31 CL would yield Inv ≈ CA − 1.31 CL, which again conflicts with the fixed working capital of 45,000. The set of equations cannot be satisfied simultaneously, so this option is unlikely.
Option 4: $51,724
Let CL = 51,724. Then CA = 1.87 × CL ≈ 96,  0? (precisely 96,  0?); calculate precisely: 51,724 × 1.87 = 96,  9? Actually 51,724 × 1.87 = 96,  0? (approx 96,  9). The working capital requirement CA − CL = 45,000 gives CA = 51,724 + 45,000 = 96,724. This matches the CA derived from the current ratio: 96,724 ≈ 1.87 × 51,724. The quick ratio condition (CA − Inv)/CL = 1.31 then implies Inv = CA − 1.31 × CL = 96,724 − 1.31 × 51,724 ≈ 96,724 − 67,  0? ≈ positive value, which is consistent with inventory being a subset of CA. All three conditions can be satisfied simultaneously, so this option is compatible.
Option 5: None of the suggested answers
Since Option 4 can satisfy all given relationships, this option is incorrect.
Summary: Only Option 4 provides self-consistent values across the current ratio, quick ratio, and working capital constraints. The other options lead to contradictions when the three equations CA = 1.87 CL, (CA − Inv)/CL = 1.31, and CA − CL = 45,000 are applied together.

At the end of 2012, Delaney Company had a current ratio of 1.87, a quick ratio of 1.31, and working capital of $45,000. Its current assets consisted of cash, accounts receivable, and merchandise inventory. Calculate the amount of Delaney's current liabilities (rounded to 0 decimals):单项选择题

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