21 A company currently has the following accounts: ⚫ Cash: $7,000 Accounts Receivable (net): $11,000 Short-Term Investment: $3,000 Inventory: $3,000 Current Liabilities: $5,000 The company has just learned that a $4,000 accounts receivable will not be collectible. How will this change impact the current ratio? It will increase from 4.8 to 5.6. It will increase from 4.2 to 5.0. It will decrease from 4.8 to 4.0. h It will decrease from 4.2 to 3.4.
21 A company currently has the following accounts: ⚫ Cash: $7,000 Accounts Receivable (net): $11,000 Short-Term Investment: $3,000 Inventory: $3,000 Current Liabilities: $5,000 The company has just learned that a $4,000 accounts receivable will not be collectible. How will this change impact the current ratio? It will increase from 4.8 to 5.6. It will increase from 4.2 to 5.0. It will decrease from 4.8 to 4.0. h It will decrease from 4.2 to 3.4.
Chapter17: The Management Of Cash And Marketable Securities
Section: Chapter Questions
Problem 2P
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Transcribed Image Text:21
A company currently has the following accounts:
⚫ Cash: $7,000
Accounts Receivable (net): $11,000
Short-Term Investment: $3,000
Inventory: $3,000
Current Liabilities: $5,000
The company has just learned that a $4,000 accounts receivable will not be collectible.
How will this change impact the current ratio?
It will increase from 4.8 to 5.6.
It will increase from 4.2 to 5.0.
It will decrease from 4.8 to 4.0.
h
It will decrease from 4.2 to 3.4.
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