Following is a schedule of the current assets and current liabilities of the Lewis Company:

The Lewis Company operated at a loss during 1979.
a Calculate the current ratio for each date.
b Explain how the improved current ratio is possible under the 1979 operating conditions.

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Current Assets Cash..... Accounts Receivable Inventories. Prepayments Total Current Assets Current Liabilities Accounts Payable Accrued Payroll, Taxes, etc. Notes Payable Total Current Liabilities Dec. 31, 1979 Dec. 31, 1978 $ 355,890 389,210 799,100 21,600 $1,565,800 $ 152,760 126,340 69,500 $ 348,600 $ 212,790 646,010 1,118,200 30,000 $2,007,000 $ 217,240 318,760 330,000 $ 866,000