Answer (B) is correct . Total assets (given as $100) equals the sum of cash (given as $10), accounts receivable ($26 as calculated using the quick ratio), inventory, and fixed assets. Inventory can be determined because it is included in current, but not quick, assets, and the current and quick ratios are known. Current assets equal $42 (1.4 current ratio × $30 current liabilities), and the quick assets equal $36 (1.2 quick ratio × $30 current liabilities). Thus, inventory, which is the only difference in this question between current and quick assets, equals $6 ($42 – $36). Fixed assets must then equal $58 ($100 total assets – $10 cash – $26 accounts receivable – $6 inventory).
Answer (A) is incorrect because Neglecting to subtract the equity balance when calculating the current liability balance results in $16.
Answer (C) is incorrect because Assuming that inventory is $0 results in $64.
Answer (D) is incorrect because Ignoring accounts receivable results in $84.
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The company has a fixed assets balance of
