2A2B BIRCH PRODUCTS INC. HAS THE FOLLOWING CURRENT ASSETS. CASH $...
23.
CSO: 2A2a
LOS: 2A2b
Birch Products Inc. has the following current assets.
Cash
$ 250,000
Marketable securities
100,000
Accounts receivable
800,000
Inventories
1,450,000
Total current assets
$2,600,000
If Birch’s current liabilities are $1,300,000, the firm’s
a.
current ratio will decrease if a payment of $100,000 cash is used to pay $100,000
of accounts payable.
b.
current ratio will not change if a payment of $100,000 cash is used to pay
$100,000 of accounts payable.
c.
quick ratio will decrease if a payment of $100,000 cash is used to purchase
inventory.
d.
quick ratio will not change if a payment of $100,000 cash is used to purchase