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

question 6

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 issued common stock at par value for $10,000 cash.Which of the following statements is true?

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

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Definitions:

French and Indian War

A conflict between France and Great Britain from 1754 to 1763 in North America, part of a larger struggle called the Seven Years' War, involving various Native American tribes.

Deteriorate

To become progressively worse over time.

Colonists

Individuals who settle in a new country or area, often for the purpose of establishing a colony that maintains ties with the parent country.

British

Relating to Great Britain, its people, culture, and history, or pertaining to the United Kingdom as a whole.