Working capital and current ratio On June 30, 2006, Calhoun Company’s total current assets were $160,000 and its total current liabilities were $100,000. On July 1, 2006, Calhoun issued a long-term note to a bank for $25,000 cash.

Required

a. Compute Calhoun’s working capital before and after issuing the note.

b. Compute Calhoun’s current ratio before and after issuing the note.