Question: What effect would the following actions have on Philippe Corporations current ratio? Provide your reasoning.

a. Starting 2015 Current Ratio = _________________

b. $100 Inventory is purchased with cash.

c. A supplier is paid $100 with cash.

d. A short-term bank loan of $100 is repaid with cash.

e. A long-term debt of $100 is paid off early.

f. A customer pays off a credit account of $100.

g. Inventory is sold for $100 at cost.

h. Inventory is sold for $200 - a profit of $100.

2015 PHILIPPE CORPORATION 2014 and 2015 Balance Sheets ($ in millions) 2014 Assets Current assets Cash $ 210 Accounts receivable Inventory 507 Total $1,072 Fixed assets Net plant and equipment $6,085 Total assets $7,157 355 $ 215 310 328 $ 853 $6,527 $7,380 $ 298 1,427 Liabilities and Owners' Equity Current liabilities Accounts payable $ 207 Notes payable 1,715 Total $1,922 Long-term debt $1,987 Owners' equity Common stock and paid-in surplus $1,000 Retained earnings 2,248 Total $3,246 Total liabilities and owners' equity $7,157 $1,725 $2,308 $1,000 2,347 $3,347 $7,380