Trek Inc. Statement of Earnings For the year ended December 31, 2020 (in thousands of dollars) Sales $1,640 Cost of sales _(800) Gross profit 840 Depreciation expense (40) Selling and administrative expenses (400) Earnings from operations 400 Loss on sale of equipment (6) Interest expense L(24) Earnings before income taxes 370 Income tax expense (100) Net earnings 270 40 Trek Inc. Summary Statement of Financial Position (in thousands of dollars) Dec. 31, 2020 Dec 31, 2019 Assets Cash $ 52 $ 60 Short-term Investments 80 Account Receivable (net) 198 80 Inventories 240 160 Prepaid Expenses 3 7 Property, Plant and Equipment (net) 857 853 Total Assets $1,430 $1,200 Liabilities and Shareholders' Equity Current Liabilities $ 240 $ 160 Bonds Payable 200 200 Common Shareholders' Equity 990 Total Liabilities and Shareholders' Equity $1,430 $1,200 840 Additional information: a) Trek, Inc. purchased new equipment in 2020 for $55,000. It also sold used equipment during the year. b) Trek Inc. had 84,000 common shares outstanding at December 31, 2019. On January 2, 2020, Trek Inc. sold and issued 6,000 additional common shares for a total amount of $60,000. There were no other transactions affecting common shares during 2020. The market price per share was $33 at December 31, 2020. Trek's board of directors declared dividends at December 31, 2020, payable in January 2021. 32 The write-off of an uncollectible account receivable would have which effect on the company's quick ratio? Assume the quick ratio is less than 1. Select one: a. Increase b. Decrease c. No effect d. Dollar amounts are needed to determine the direction of the effect. Which of the following transactions would represent a decrease in the company's current ratio, which equals 0.93? Select one: O a. The write-off of an account receivable b. The purchase of the company's own bonds from bondholders c. The issuance of shares in exchange for land O d. The purchase of merchandise inventory on account