Affect Walton's current ratio,quick ratio & working capital
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As of December 31, 2010, Walton Corporation had a current ratio of 1.84, quick ratio of 1.45, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. Indicate how the given transaction, if it occurred in January 2011, would affect Walton's current ratio, quick ratio, and working capital.
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Solution Summary
The solution indicates how the given transaction would affect Walton's current ratio, quick ratio, and working capital.
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The journal entry to accrue interest is as follows.
Debit Interest Expense
Credit Accrued Interest Expense
Also, Current Ratio = Current Asset/Current Liabilities
Quick Ratio = (Current ...
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