Use This Information to Answer the Following Questions

question 21

Multiple Choice

Use this information to answer the following questions:
Hard-up Ltd has a current ratio of 0.75. Its current liabilities amount to $200,000. It borrows $75,000 from a finance company, repayable in 5 years.
-What is the current ratio following the loan?

• A) 0.818
• B) 1.125
• C) it cannot be determined from the above information
• D) 0.1125.

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Definitions:

Rent Expired

An expense recognized when the rental period has ended, reflecting the cost of using a property or equipment for that period.

Unearned Fees

Income received by a business for which the services have not yet been performed or delivered.

Adjusted Trial Balance

A listing of all company accounts that will appear in the financial statements after adjusting entries have been made.

Supplies Expense

Costs incurred for supplies used in the operations of a business.