Fact Pattern:

Tosh Enterprises reported the following account information:

Accounts receivable	$400,000
Accounts payable	260,000
Bonds payable, due in 10 years	600,000
Cash	200,000
Interest payable, due in 3 months	20,000

Inventory	$800,000
Land	500,000
Short-term prepaid expense	80,000

What will happen to the ratios below if Tosh Enterprises uses cash to pay 25% of the accounts payable?

Current Ratio	Quick Ratio

Increase

Decrease

Increase

Increase

Decrease

Increase

Decrease

Decrease