ABC Inc. had the following balances:

Account20142013

Cash $30,000$71,000

Accountsreceivable82,00084,000

Trademark 93,50070,000

Boats 101,500168,500

Accounts payable 51,00033,500

Salaries payable 55,000126,500

Short-term notes payable 137,00063,500

Unearned rent 31,000 33,500

Long-term notes payable 78,500105,500

Consulting revenue earned 121,000134,000

Sales 39,00085,000

Office salaries expense 134,500123,000

Advertising expense 71,00065,000

a) Calculate the working capital for 2014 and 2013. Please make sure your final answer(s) are accurate to the nearest whole number.

20142013Working capital

b) Is the change in working capital favourable or unfavourable?

The change in working capital is().

c) Calculate the current ratio for 2014 and 2013. Please make sure your final answer(s) are accurate to 2 decimal places.

20142013Current ratio

d) Is the change in current ratio favourable or unfavourable?

The change in current ratio is().

e) For the next two questions, assume that on the last day of 2014, the entire $51,000 balance in Accounts payable was paid off by cash. How would the working capital have changed?

The working capital would have.

f) How would the current ratio have changed?

The current ratio would have