Stanley Company has current assets of $800,000 and current liabilities of $500,000. Stanley Company’s current ratio...
Stanley Company has current assets of $800,000 and current liabilities of $500,000. Stanley Company’s current ratio would be increased by:
A. Collect cash of $100,000 from a customer on accounts receivable.
B. Pay cash of $100,000 for a six-month note at maturity.
C. Purchase of $100,000 of inventory on account.
D. Purchase office supplies with cash of $100,000.
Homework Answers
Current ratio increase by :
Current ratio = 800000/500000 = 1.60
| A. Collect cash of $100,000 from a customer on accounts receivable | 800000/500000 = 1.60 |
| B. Pay cash of $100,000 for a six-month note at maturity. | 700000/400000 = 1.75 |
| C. Purchase of $100,000 of inventory on account. | 900000/600000 = 1.50 |
|
D. Purchase office supplies with cash of $100,000. |
800000/500000 = 1.60 |
So answer is b) Pay cash of $100000 for a six month note at maturity
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