Falcon Corporation Has Current Assets of $400,000 and Current Liabilities

question 71

Essay

Falcon Corporation has current assets of $400,000 and current liabilities of $275,000.
Required:
Compute the effect of each of the following transactions on Falcon's current ratio:
a.Refinanced a $60,000 long-term mortgage with a short-term note.
b.Purchasing $108,000 of merchandise inventory with short-term accounts payable.
c.Paying $50,000 of short-term accounts payable.
d.Collecting $90,000 of short-term accounts receivable.

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Definitions:

Behaviourism

A theory of learning which states that all behaviors are acquired through conditioning, emphasizing external factors over internal traits.

Functionalism

A perspective in psychology that focuses on how mental and behavioral processes function to enable individuals to adapt to their environments.

Animal Training

The practice of teaching animals specific responses to specific conditions or stimuli, often used for companionship, service, or entertainment.

Emotional Reactions

The spontaneous and often unconscious responses to events or stimuli that involve feelings, physiological arousal, and changes in behavior.