Kingery Corporation Has Current Assets of $1,800,000 and Current Liabilities

question 167

Multiple Choice

Kingery Corporation has current assets of $1,800,000 and current liabilities of $750,000. If they issue $100,000 of new stock what will their new current ratio be? (rounded)

• A) 2.5:1
• B) 2.1:1
• C) 2.3:1
• D) 2.4:1

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Definitions:

Payroll Tax

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff, used to fund social security and other government programs.

Corporate Income Tax

A tax imposed on the net income (profit) of corporations, calculated at a corporate tax rate.

Capital Intensive Techniques

Production methods that require a higher investment in physical capital rather than labor.