If the company purchased a $60,000 piece of equipment by paying $30,000 and having the rest financed with a short-term note from the bank,then immediately after this transaction what is the expected impact on the components of the current ratio?

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The current ratio is calculated by dividing current assets by current liabilities.The purchase of equipment for cash with the remainder on account is an asset source transaction;the current asset account Cash decreases by $30,000,the long-term asset account Property,plant,and equipment increases by $60,000,and the current liability account Short-term Notes Payable increases by $30,000.The current ratio is calculated by dividing current assets by current liabilities.Current assets decrease and current liabilities increase by $30,000 as a result of this transaction.The reason Notes Payable is classified as a current liability is due to its short-term classification.

If the Company Purchased a $60,000 Piece of Equipment by Paying