Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 2 - A Further Look at Financial Statements - Exercises - Page 80: E2-10

Answer

Existing current ratio = 1.75 (Times) Existing working capital = 30,000 New current ratio = 3.00 (Times) New working capital = 30,000

Work Step by Step

(W-1) Revised Current Assets (70,000 - 25,000) = 45,000 (W-2) Revised Current Assets (40,000 - 25,000) = 15,000
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