On December 31, 2008, Seminole Co. had current assets of $25,000 in cash and current liabilities of $8,000 in accounts payable, resulting in a current ratio of 3.13. The company estimates that warranty expense for 2009 is 6% of sales that totaled $200,000. Calculate Seminole's current ratio after warranty expense is recognized.

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The Answer of On December 31, 2008, Seminole Co. had current assets of $25,000 in cash and current liabilities of $8,000 in accounts payable, resulting in a current ratio of 3.13. The company estimates that warranty expense for 2009 is 6% of sales that totaled $200,000. Calculate Seminole's current ratio after warranty expense is recognized.