Last Year Thatcher Industries Had a Current Ratio of 1

question 38

Multiple Choice

Last year Thatcher Industries had a current ratio of 1.2, a quick ratio of 0.8, and current liabilities of $500,000. Which of the following statements is most correct?

• A) If the company obtained a short-term bank loan for $500,000 and used the proceeds to purchase inventory, its current ratio would fall.
• B) Last year Thatcher industries had $200,000 in inventories.
• C) Last year Thatcher industries had $416,667 in current assets.
• D) All of the answers above are correct.
• E) Answers a and b are correct.

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Definitions:

Photoreceptors

Cells in the retina that are sensitive to light and enable the process of converting light into electrical signals for vision.

Optic Disc

The region in the eye where nerve fibers from the retina converge to form the optic nerve, leading to a natural blind spot.

Blind Spot

Retinal region where axons forming the optic nerve leave the eye and where blood vessels enter and leave; has no photoreceptors and is thus said to be blind.

Iris

The iris is the colored part of the eye that surrounds the pupil and controls the amount of light entering the eye by adjusting the size of the pupil.