Jay Oullette, CEO of Bumper to Bumper Incorporated, anticipates that his company's year$-$end balance sheet will show current assets

of $$12,801$ and current liabilities of $$7,540.$ Oullette has asked your advice concerning a possible early payment of $$3,930$ of accounts

payable before year$-$end, even though payment isn't due until later.

Required:

a$.$ Calculate the firm's working capital and current ratio under each situation.

b$.1.$ Assume that Bumper to Bumper had negotiated a short$-$term bank loan of $$5,000$ 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?

Complete this question by entering your answers in the tabs below.

Calculate the firm's working capital and current ratio under each situation.

Note: Round "Current ratio" answers to $1$ decimal place.