Mitchell Corporation Has Current Assets of $1,600,000 and Current Liabilities

question 56

Multiple Choice

Mitchell Corporation has current assets of $1,600,000 and current liabilities of $750,000.If they issue $200,000 of new stock what will their new current ratio be? (rounded)

• A)2.4:1
• B)1.9:1
• C)1.7:1
• D)2.13:1

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Definitions:

Living Trust

A trust created by the grantor (settlor) and effective during his or her lifetime.

Intestacy Law

Legal provisions that govern the distribution of a deceased person's estate when they die without a valid will, determining how assets are allocated among survivors.

Estate Planning

Planning in advance how one’s property and obligations should be transferred on one’s death. Wills and trusts are two basic devices used in estate planning.

Duty of Loyalty

An obligation of fiduciaries, such as corporate directors or trustees, to act in the best interest of their beneficiaries or the corporation without conflict of interest.