As of December 31, Year 1, Gant Corporation Had a Current

question 111

Multiple Choice

As of December 31, Year 1, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost.
- On January 1, Year 2, Gant sold inventory on account for $6,000. Which of the following statements is incorrect?

• A) Gant's current ratio will increase.
• B) Gant's quick ratio will decrease.
• C) Gant's working capital will increase.
• D) None of these answers are correct.

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