Stake Technology Inc. had the following balances:

Account 2014 2013

Cash$59,000$80,000

Accounts receivable114,500177,000

Prepaid interest20,00034,500

Trademark79,500120,500

Accounts payable27,00076,000

Salaries payable82,00048,000

Short-term notes payable73,50049,000

Unearned rent35,50045,500

Long-term notes payable90,000152,000

Consulting revenue earned89,000123,500

Interest earned29,00025,500

Interest expense39,00016,000

Rent expense114,00091,500

a) Calculate the working capital for 2014 and 2013. Please make sure your final answer(s) are accurate to the nearest whole number.

2014

2013

Working capital

b) Is the change in working capital favourable or unfavourable?

The change in working capital is

unfavourable

.

c) Calculate the current ratio for 2014 and 2013. Please make sure your final answer(s) are accurate to 2 decimal places.

2014

2013

Current ratio

d) Is the change in current ratio favourable or unfavourable?

The change in current ratio is

unfavourable

.

e) For the next two questions, assume that on the last day of 2014, the entire $27,000 balance in Accounts payable was paid off by cash. How would the working capital have changed?

The working capital would have

not changed

.

f) How would the current ratio have changed?

The current ratio would have