Hammer Corporation Wrote Off $185,000 of Obsolete Inventory at December

question 39

Essay

Hammer Corporation wrote off $185,000 of obsolete inventory at December 31,2011.
Required:
What effect did this write-off have on the company's 2011 current and quick ratios?

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Definitions:

Autonomous Consumption

The level of consumption spending that occurs when income is zero, representing the expenditures necessary for basic needs.

APC

Absolute Plate Count, a method used in microbiology to estimate the total number of viable bacteria in a sample. If this is not the intended context, then NO.

Induced Consumption

The portion of spending by households that increases with their income, demonstrating how consumer spending is influenced by changes in income.

Autonomous C

Consumer spending that does not depend on current income, influenced by factors like confidence and wealth, key for understanding economic fluctuations.