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

38. 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.

39. 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.

40. 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.