To find the current ratio using the balance sheet provided, we need to follow these steps:
1. Identify Current Assets:
Current assets are the assets that can be converted into cash within a year. From the balance sheet, we have:
- Cash: [tex]$35,000
- Inventory: $[/tex]41,000
Therefore, the total current assets are:
[tex]\[
\text{Current Assets} = \$35,000 + \$41,000 = \$76,000
\][/tex]
2. Identify Current Liabilities:
Current liabilities are the liabilities that need to be paid within a year. From the balance sheet, we have:
- Notes: [tex]$45,000
- Wages: $[/tex]56,000
Therefore, the total current liabilities are:
[tex]\[
\text{Current Liabilities} = \$45,000 + \$56,000 = \$101,000
\][/tex]
3. Calculate the Current Ratio:
The current ratio is calculated by dividing the total current assets by the total current liabilities. Hence:
[tex]\[
\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} = \frac{76,000}{101,000} \approx 0.752
\][/tex]
Therefore, the decimal value for the current ratio is approximately [tex]\(0.752\)[/tex].
