If the firm sells inventory that was purchased for 50000 at

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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?

Reference no: EM13572941

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