Question
Hansen's Auto Supply has $1,545,000 in current assets and $650,000 in current liabilities. Its initial inventory level is $790,000, and it will raise funds as
Hansen's Auto Supply has $1,545,000 in current assets and $650,000 in current liabilities. Its initial inventory level is $790,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can its short-term debt (notes payable) increase without pushing its current ratio below 2.1?
| a. | $290,476 | |
| b. | $554,545 | |
| c. | $85,714 | |
| d. | $163,636 | |
| e. | $180,000 |
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Understanding Financial Accounting
Authors: Christopher D. Burnley
2nd Canadian Edition
9781119406921
