Edward Allen Interiors Inc. is a leading manufacturer and retailer of home furnishings in the United States and abroad. The following is adapted from Edward Allens September 30, 2016, trial balance. (The amounts shown represent millions of dollars.)

Accounts Payable	$	132
Accounts Receivable		30
Cash		140
Common Stock		30
Equipment		375
Inventory		176
Notes Payable (long-term)		235
Notes Payable (short-term)		2
Prepaid Rent		32
Retained Earnings		389
Salaries and Wages Payable		40
Software		75

Assume that the following events occurred in the following quarter.

1. Paid $35 cash for additional inventory.
2. Issued additional shares of common stock for $15 in cash.
3. Purchased equipment for $210; paid $100 in cash and signed a note to pay the remaining $110 in two years.
4. Signed a short-term note to borrow $15 cash.
5. Conducted negotiations to purchase a sawmill, which is expected to cost $38.

rev: 02_21_2018_QC_CS-119136

1. Required:

2. 1-a. Calculate Edward Allens current ratio at September 30, 2016, prior to the transactions listed above. (Round your answer to 2 decimal places.)

1. 1-b. Based on the above calculation and analysis of TripAdvisors current ratio 4.73, indicate which company is in a better position to pay liabilities.

A)Edward Allen

B)TripAdvisor