Question

On June 30, 2018, Thornton Company’s total current assets were $499,500 and its total current liabilities...

On June 30, 2018, Thornton Company’s total current assets were $499,500 and its total current liabilities were $275,000. On July 1, 2018, Thornton issued a long-term note to a bank for $40,200 cash.

Required

  1. Compute Thornton’s working capital before and after issuing the note.

  2. Compute Thornton’s current ratio before and after issuing the note. (Round your answers to 1 decimal place.)

Before the transaction After the transaction
a. Working Capital
b. Current Ratio
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