Vince Corporation has current assets of $300,000 and current liabilities of $175,000.
Required:
Compute the effect of each of the following transactions on Vince's current ratio:
a. Refinanced a $50,000 long-term mortgage with a short-term note.
b. Purchasing $80,000 of merchandise inventory with short-term accounts payable.
c. Paying $30,000 of short-term accounts payable.
d. Collecting $40,000 of short-term accounts receivable.