1. Precious Toys Ltd wrote off EUR 100,000 of obsolete inventory at 31 December 2004. What effect did this write-off have on the company's 2004 current and quick ratios?
2. Melissa SpA has current assets of EUR 90,000 and current liabilities of EUR 180,000. Compute the effect of each of the following transactions on Melissa's current ratio:
(a) Refinancing a EUR 30,000 long-term loan with a short-term loan.
(b) Purchasing EUR 50,000 of goods.
(c) Paying EUR 20,000 of trade payables.
(d) Collecting EUR 10,000 of trade receivables.