By how much must inventory change (in dollars) for the current ratio to equal 1? Cash...
| By how much must inventory change (in dollars) for the current ratio to equal 1? | |||
| Cash | 3,000,000 | Accounts Payable | 4,300,000 |
| Accounts Receivable | 1,000,000 | Notes Payable | 5,100,000 |
| Inventory | 5,000,000 | ||
a. $0
b. $100,000
c. $3,400,000
d. $400,000
Homework Answers
| Existing current assets = 3000000+1000000+5000000 = | $ 90,00,000 |
| Existing current liabilities = 4300000+5100000 = | $ 94,00,000 |
| Required current assets for current ratio to be 1 = | $ 94,00,000 |
| Less: Existing current assets | $ 90,00,000 |
| Increase in inventory required | $ 4,00,000 |
| Answer: Option [d] $400,000 |
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By how much must inventory change (in dollars) for
the current ratio to equal 1?
Cash...
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