At the End of Last Year, a Firm Had a Current

question 148

Multiple Choice

At the end of last year, a firm had a current ratio of 1.4, net fixed assets of $2,500, notes payable of $0, and total assets of $5,100. Based on pro forma sales, current liabilities will increase by $500 and current assets will increase by $900. By how much can notes payable increase on the pro forma statement without changing the current ratio?

• A) $0
• B) $143
• C) $400
• D) $667
• E) $760

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Definitions:

Single Person

An individual who is unmarried or legally separated from a spouse, affecting their tax filing status and benefits.

Taxable Income

The portion of an individual's or corporation's income used to determine how much tax is owed to the federal government or other taxing authorities.

Tax Liability

The total amount of tax that an individual or business is legally obligated to pay to a tax authority based on earnings or profit.

Qualifying Widow(er)

A tax filing status available to a widowed individual who has a dependent child, offering the same tax benefits as married filing jointly for two years following the spouse's death.