Question Five (20 points)

Gammar Corporation has current assets of $90,000 and current liabilities of $180,000.

Required:

Compute the effect of each of the followingindependent transactions on Gammars current ratio: (Round your answers to 2 decimal places.

1. Refinancing a $30,000 long-term mortgage with a short-term note. (5 points)

2. Purchasing $50,000 of merchandise inventory with short-term accounts payable.(5 points)

3. Paying $20,000 of short-term accounts payable.(5 points)

4. Collecting $10,000 of short-term accounts receivable.(5 points)