Answer:
* The firm's current assets and working capital at April 30:
+ Current asset $125,970
+ Working capital: $51,870
* The current ratio and working capital at April 30 as if the April 29 payment had not been made:
+ Current ratio: 1.57
+ Working Capital: $51,870
Explanation:
* The firm's current assets and working capital at April 30:
We have Current asset/ Current Liabilities = Current ratio <=> Current asset = Current liabilities x current ratio = 74,100 x 1.7 = $125,970.
Working capital = Current asset - Current Liabilities = 125,970 - 74,100 = $51,870.
* The current ratio and working capital at April 30 as if the April 29 payment had not been made:
- Current asset will be 125,970 + 17,200 = $143,170; Current Liabilities will be 74,100 + 17,200 = $91,300 ( as cash has not be deducted for account payable settlement, as a result, account payable is still maintained balance of 17,200 higher than the scenario where the payable had been settled).
=> Current ratio = 143,170/91,300 = 1.57; Working Capital = 143,170 - 91,300 = $51,870.
