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As of December 31, Year 1, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $29,000. The company

As of December 31, Year 1, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $29,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, Year 2, Gant issued common stock at par value for $10,000 cash. Which of the following statements is correct?

Multiple Choice

  • A)

Gant's current ratio will decrease.

  • B)

Gant's current ratio will increase.

  • C)

Gant's quick ratio will decrease.

  • D)

Gant's working capital will decrease.

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