Problem
Effect of transactions on working capital and current ratio Evans Inc. had current liabilities at April 30 of $275,000. The firm's current ratio at that date was 2.1.
Task
I. Calculate the firm's current assets and working capital at April 30.
II. Assume that management paid $27,500 of accounts payable on April 29. Calculate the current ratio and working capital at April 30 as if the April 29 payment had not been made. Round your current ratio answer to two decimal places.
III. Explain the changes, if any, to working capital and the current ratio that would be caused by the April 29 payment.