Management of Rivers Co. anticipates that its year-end balance sheet will show current assets of $12,801 and current liabilities of $7,620. Management is considering paying $3,830 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. (Round your "current ratio" to 2 decimal places. (e.g., 32.16))

do not prepay account payable prepay account payable

working capital ? ?

current ratio ? ?

(b.1)

Assume that Rivers Co. had negotiated a short-term bank loan of $6,000 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. (Round your "current ratio" to 2 decimal places. (e.g., 32.16))

with loan without loan

working capital ? ?

current ratio ? ?