Applying for a Loan. Assets Current assets Cash 14,000 Accounts receivable 7,000 Total current assets 21.000 Fixed Assets Property, plant & equipment 112.000 Accumulated depreciation (35,000) Net fixed assets 77.000 Total assets 98,000 Liabilities and Owner's Equity Current liabilities Accounts payable Note payable Deposits from customers Total current liabilities Total liabilities Owner's equity Common stock Retained earnings Total owner's equity Total liabilities and equity 2.500 26,500 5,000 34.000 34,000 50.000 14.000 64,000 98,000 Use balance sheet to the process of applying for a loan. The answers to the questions are as follows: 11. What is the amount of current assets and long-term assets that you have? 12. Calculate the current ratio. Using the rule of thumb given in the text, is this a good or bad ratio? Hint: Current ratio = current assets current liabilities By the rule of thumb, it should be 2 or greater. The current ratio is an indicator of a business' ability to repay debt when it is due 13. Why would the current ratio matter to your banker