On June 30, 2006, Victor Company's total current assets were $160,000 and its total current liabilities were $100,000. On July 1, 2006, Victor issued a short-term note to a bank for $25,000 cash.
A. Compute Victor's working capital before and after issuing the note.
B. Compute Victor's current ratio before and after issuing the note.
A. a. Victor's working capital before issuing the note= Total current assets -Total current liabilities as on June 30,2006 =$ 160000-$100000=$60000
The solution contains calculations of working capital and current ratio.