Homework Answers
Current assets = $35,550
Current ratio = 1.58
Current ratio = Current assets/Current liabilities
1.58 = 35,550/Current liabilities
Current liabilities = $22,500
2.
Delivery truck of $31,000 is purchased by paying cash $4,400 and signing a two year note.
It reduces current assets by $4,400 but does not effect current liabilities.
New current assets = 35,550 - 4,400
= $31,150
New current ratio = New current assets/Current liabilities
= 31,150/22,500
= 1.38
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