FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A company with working capital of $500,000 and a current ratio of 2:1 pays a $100,000 short-term liability. The amount of working capital immediately after payment is? The current ratio immediately after the payment is? 

Expert Solution
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Working:

Current ratio = Current Assets / Current liability

2 = Current Assets / Current liability

Current Assets = 2 x Current liability

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