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-   -   Assuming a current ratio of 1.0 and an acid-test ratio of 0.80, how will the borrowin (https://www.askmehelpdesk.com/showthread.php?t=737618)

  • Mar 5, 2013, 01:59 PM
    chiquitita254
    Assuming a current ratio of 1.0 and an acid-test ratio of 0.80, how will the borrowin
    Assuming a current ratio of 1.0 and an acid-test ratio of 0.80, how will the borrowing of cash by issuing a six-month note payable affect each ratio?

    Decrease the current ratio and decrease the acid-test ratio.
    Increase the current ratio and increase the acid-test ratio.
    No change to the current ratio and increase the acid-test ratio.
    Decrease the current ratio and increase the acid-test ratio.
  • Mar 5, 2013, 02:31 PM
    chiquitita254
    Region Jet has a $50 million liability at December 31, 2012, of which $10 million is
    Region Jet has a $50 million liability at December 31, 2012, of which $10 million is payable in 2013. In its December 31, 2012 balance sheet, the company reports the $50 million debt as


    A $10 million current liability and a $40 million long-term liability on the balance
    Sheet.
    A $50 million long-term liability on the balance sheet.
    A $50 million current liability on the balance sheet.
    A $40 million current liability and a $10 million long-term liability on the balance sheet.
  • Mar 5, 2013, 02:46 PM
    Curlyben
    What do YOU think ?
    While we're happy to HELP we won't do all the work for you.
    Show us what you have done and where you are having problems..
  • Mar 5, 2013, 06:15 PM
    chiquitita254
    I already figured it out 10 million current and 40 long term. I was just having a hard time trying to figure out how you categorize the two things.
  • Mar 5, 2013, 06:17 PM
    chiquitita254
    For the ratio question I thought that if you increase the liabilities (increasing the denominator) that both would decrease, but I was wrong. What am I missing?

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