03-30-2005, 01:46 AM
ABC Company has current assets of Rs. 800,000 and current liabilities of Rs. 500,000. What effect would the following transactions have on the firmâs current ratio and state the resulting figures?
a) Two new trucks are purchased for a total of Rs.100,000 in cash.
b) The company borrows Rs.100,000 short terms to carry an increase in receivables of the same amount.
c) Additional common stock of Rs. 200,000 is sold and the proceeds invested in the expansion of several terminals.
d) The company increases its accounts payable to pay a cash dividend of Rs. 40,000 out of cash.
a) Two new trucks are purchased for a total of Rs.100,000 in cash.
b) The company borrows Rs.100,000 short terms to carry an increase in receivables of the same amount.
c) Additional common stock of Rs. 200,000 is sold and the proceeds invested in the expansion of several terminals.
d) The company increases its accounts payable to pay a cash dividend of Rs. 40,000 out of cash.
