On June 30, Year 3, Franza Company’s total current assets were $900,000 and its total current liabilities were $360,000. On July 1, Year 3, Franza issued a long-term note to a bank for $72,000 cash. Required a. Compute Franza’s working capital before and after issuing the note. b. Compute Franza’s current ratio before and after issuing the note. (Round your answers to 1 decimal place
On June 30, Year 3, Franza Company’s total current assets were $900,000 and its total current liabilities were $360,000. On July 1, Year 3, Franza issued a long-term note to a bank for $72,000 cash. Required a. Compute Franza’s working capital before and after issuing the note. b. Compute Franza’s current ratio before and after issuing the note. (Round your answers to 1 decimal place
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On June 30, Year 3, Franza Company’s total current assets were $900,000 and its total current liabilities were $360,000. On July 1, Year 3, Franza issued a long-term note to a bank for $72,000 cash.
Required
a. Compute Franza’s
b. Compute Franza’s
Transcribed Image Text:On June 30, Year 3, Franza Company's total current assets were $900,000 and its total current liabilities were $360.000. On July 1.
Year 3, Franza issued a long-term note to a bank for $72.,000 cash.
Requlred
a. Compute Franza's working capital before and after issuing the note.
b. Compute Franza's current ratio before and after issuing the note. (Round your answers to 1 decimal place.)
Before the
After the
transaction
transaction
a.
Working capital
540,000S
540,000
b.
Current ratio
2.5
2.3
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