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At the End of Last Year, a fiRm Had a Current

Question 109

Multiple Choice

At the end of last year, a firm had a current ratio of 1.4, net fixed assets of $2,500, notes payable of $0, and total assets of $5,100. Based on pro forma sales, current liabilities will increase by $500
And current assets will increase by $900. By how much can notes payable increase on the pro
Forma statement without changing the current ratio?


A) $0
B) $143
C) $400
D) $667
E) $760

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