On June 30, 2008, Thorpe Companys total current assets were $250,000 a

QUESTION

On June 30, 2008, Thorpe Companys total current assets were $250,000 and its total current liabilities were $125,000. On July 1, 2008, Thorpe issued a short-term note to a bank for $25,000 cash.
Required:
1. Compute Thorpes working capital before and after issuing the note.
2. Compute Thorpes current ratio before and after issuing the note.
(Round your answers to the current ratio to one decimal place. Omit the œ$ sign in your response.)
a.
Working Capital before the Transaction: $

Working Capital after the Transaction: $

b.
Current Ratio Before the Transaction:

Current Ratio After the Transaction:
Before Transaction After Transaction Current Assets $ 250,000.00 $ 275,000.00 Current Liabilities $ 125,000.00 $ 150,000.00 Working Capital = Current Assets -¦

Current Liabilities $ 125,000.00 $ 125,000.00 Current Ratio = Current Assets / Current Liabilities 2 1.83

ANSWER:

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