Choice "C" is correct. The acid-test ratio is calculated by taking the current assets excluding inventory and prepaid expenses and dividing by current liabilities. In this case, cash and accounts receivable ($300 + $1,200$1,500) are divided by current liabilities ($1,000), resulting in a ratio of $1,500 / $1,000, or 1.5.
Choice "d" is incorrect. The numerator in the acid-test ratio formula includes only cash and accounts receivable. It would not include prepaid expenses.
Choice "a" is incorrect. The numerator in the acid-test ratio formula includes only cash and accounts receivable. It would not include inventory.
Choice "b" is incorrect. The numerator in the acid-test ratio formula includes only cash and accounts receivable. It would not include inventory and prepaid expenses.