AAA Corp. has current assets of $1,000,000 and current liabilities of $500,000
Question # 00173198
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Updated on: 01/15/2016 09:06 AM Due on: 02/14/2016
AAA Corp. has current assets of $1,000,000 and current liabilities of $500,000, resulting in a current ratio of 2.0. For each of the following transaction, determine if the current ratio will increase, decrease or remain the same. Consider each transaction independent of the others.
(a) Purchased $20,000 of supplies on credit.
(b) Paid Accounts Payable in the amount of $50,000.
(c) Recorded $100,000 of cash contributed by a stockholder for common stock.
(d) Borrowed $250,000 from a local bank, to be repaid in 90 days.
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Rating:
/5
Solution: AAA Corp. has current assets of $1,000,000 and current liabilities of $500,000