Assume that the current ratio for Arch Company is 3.5, its acid-test ratio is 2.0, and its working capital is $390,000. Answer each of the following questions independently, always referring to the original information.
Current liabilities: 156000
Merchandise Inventory: 234000
1) If the firm pays an account payable of $58,000, what will its new current ratio and working capital be?
2) If the firm sells inventory that was purchased for $50,000 at a cash price of $63,000, what will its new acid-test ratio be?