Analyzing the impact of transactions on the current ratio

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Reference no: EM132092195

Question: Analyzing the Impact of Transactions on the Current Ratio BSO, Inc., has a current ratio of 2.0 ( = $1,000,000 ÷ $500,000). For each of the following transactions, determine whether the current ratio will increase, decrease, or remain the same.

(a) Purchased $20,000 of new inventory on credit.

(b) Paid accounts payable in the amount of $50,000.

(d) Borrowed $250,000 from a local bank to be repaid in 90 days.

Reference no: EM132092195

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