ay Oullette, CEO of Bumper to Bumper Inc., anticipates that his company's year-end balance sheet will show current assets of $12,639 and current liabilities of $7,540. Oullette has asked your advice concerning a possible early payment of $3,830 of accounts payable before year-end, even though payment isn't due until later. Required:

1. Calculate the firms working capital and current ratio under each situation.
2. Assume that Bumper to Bumper had negotiated a short-term bank loan of $6,000 that can be drawn down either before or after the end of the year. Calculate working capital and the current ratio at year-end under each situation, assuming that early payment of accounts payable is not made. When would you recommend that the loan be taken?

Calculate the firms working capital and current ratio under each situation. (Round "Current ratio" answers to 1 decimal place.)

Assume that Bumper to Bumper had negotiated a short-term bank loan of $6,000 that can be drawn down either before or after the end of the year. Calculate working capital and the current ratio at year-end under each situation, assuming that early payment of accounts payable is not made. (Round "Current ratio" answers to 1 decimal place.)

When would you recommend that the loan be taken?