Barnaby Cartage Company has current assets of $800,000 and current liabilities of $500,000. What effect would the following transactions have on the firm’s current ratio (and state the resulting figures)?
a. Two new trucks are purchased for a total of $100,000 in cash.
b. The company borrows $100,000 short term to carry an increase in receivables of the same amount.
c. Additional common stock of $200,000 is sold and the proceeds invested in the expansion of several terminals.
d. The company increases its accounts payable to pay a cash dividend of $40,000 out of cash.