Pinecrest Company Use the selected data from Pinecrest Companys financial statements to answer the following question. 2018 2017 Cash $ 22,000 $ 14,000 Accounts receivable 42,000 16,000 Merchandise inventory 22,000 83,000 Prepaid expenses 23,000 18,000 Total current assets $109,000 $131,000 Total current liabilities $ 65,000 $ 72,000 Net credit sales 221,000 326,000 Cost of goods sold 168,000 299,000 Net cash flow from operating activities 16,000 29,000

1. Refer to the data for Pinecrest Company. The current ratio for 2018 is a. 0.60 to 1. b. 0.99 to 1. c. 1.34 to 1. d. 1.68 to 1.

2. Refer to the data for Pinecrest Company. Which of the following statements is true? a. The current ratio increased from 2017 to 2018. b. The acid-test ratio decreased from 2017 to 2018. c. The amount of working capital decreased from 2017 to 2018. d. Assuming extreme conditions do not exist, the company appears to be in a worse position to pay its current debts at the end of 2018 compared to 2017.

3. Refer to the data for Pinecrest Company. Which of the following statements is true? a. Net income must be at least $36,000 for 2018. b. Net income must be less than $36,000 for 2018. c. Cash flows from operating activities is twice as large as net income for 2018. d. The amount of net income for 2018 cannot be determined based on the data provided.