Homework SourseM CH2 Quiz tpx in SongHuan Chen 4of 11 050 points pay off to
Solution
Q1. Answer is The company current ratio will decrease.
The explanation is as follows:
Total current assets: $14,000 (cash)+ $37,000 (Accounts receivable) +$2,500 (supplies) = $53,500
Total current liabilities: $52,000 (accounts payable) + $12,400 (wages payable) = $64,400
Current ratio earlier: Current assets / current liabilities = $53,500 / $64,400 = 0.83
Now, after paying cash of $8,000 to wages payable, thee revised current assets and liabilities and ratio is as follows:
Revised current assets: $ 53,500 -$8,000 = $45,500
Revised current liabilities: $ 64,400 -$8,000 = $ 56,400
Revised current ratio = $ 45,500 / $56,400 = 0.806
Q2. Answer is The payment to purchase property and equipment.
The explanation is as follows:
The Investing activities includes the activities related to sale or purchase of property and equipment and other fixed assets.
