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    Working Capital and Current Ratio

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    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.

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    Solution Preview

    A. a. Victor's working capital before issuing the note= Total current assets -Total current liabilities as on June 30,2006 =$ 160000-$100000=$60000
    b. ...

    Solution Summary

    The solution contains calculations of working capital and current ratio.