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

question 70

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 purchased merchandise on account for $4,000.Which of the following statements is correct?

• A) Gant's current ratio will decrease.
• B) Gant's quick ratio will increase.
• C) Gant's working capital will increase.
• D) Gant's quick ratio will increase and its current ratio will decrease.

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