BSO, Inc., has liquid assets of $600,000 and current liabilities of $500,000, re
ID: 2353114 • Letter: B
Question
BSO, Inc., has liquid assets of $600,000 and current liabilities of $500,000, resulting in a quick ratio of 1.2.Required:
Compute the quick ratio for each of the following transactions and determine whether it will increase, decrease, or remain the same. Consider each transaction as independent case. (Round your answers to 2 decimal places.)
a. Purchased $20,000 of new inventory on credit.
b. Paid accounts payable in the amount of $50,000.
c. Recorded accrued salaries in the amount of $100,000.
d. Borrowed $250,000 from a local bank, to be repaid in 90 days.
Explanation / Answer
d. Borrowed $250,000 from a local bank, to be repaid in 90 days
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