1- A company with $70,000 in current assets and $50,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

a.both increase

b.increase and remain the same, respectively

c.remain the same and decrease, respectively

d.both decrease

2 - The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Use this information to answer the question that follow.

Assets
Cash and short-term investments		$ 30,000
Accounts receivable (net)		20,000
Inventory		15,000
Property, plant, and equipment		185,000
Total assets		$250,000

Liabilities and Stockholders' Equity
Current liabilities			$ 45,000
Long-term liabilities			70,000
Stockholders' equityCommon			135,000
Total liabilities and stockholders' equity			$250,000

Income Statement
Sales		$85,000
Cost of goods sold		45,000
Gross margin		$40,000
Operating expenses		(15,000)
Interest expenses		(5,000)
Net income		$20,000

Number of shares of common stock outstanding	6,000
Market price of common stock	$20
Total dividends paid	$9,000
Cash provided by operations	$30,000

Using the data provided for Diane Company, what is the asset turnover?