On June 30, 2014, Freeman Company’s total current assets were $497,000 and its total current…

On June 30, 2014, Freeman Company’s total current assets were $497,000 and its total current liabilities were $271,000. On July 1, 2014, Freeman issued a long-term note to a bank for $39,200 cash.

Required

a.	Compute Freeman’s working capital before and after issuing the note.
	Working Capital Before transaction: ? After Transaction: ?

b.	Compute Freeman’s current ratio before and after issuing the note.(Round your answers to 2 decimal places.)
	Current Ratio Before Transaction: ? After Transaction: ?

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Best Answer
• Anonymous answered this 9 minutes later660 answers• 65% Best Answer
  

  Total Current Assets before issuing note	497,000.00
  Total Current Liability before issuing note	271,000.00
  Working Capital(Current Asseys- Current Liabilities)	226,000.00
  Current Ratio (Current Assets/Current Liabilities)	1.8339
  Total Current Assets before issuing note	497,000.00
  Long term Note issued for cash	39,200.00
  Total Current Assets after issuing note	536,200.00
  Total Current Liability after issuing note	271,000.00
  Working Capital(Current Asseys- Current Liabilities)	265,200.00
  Current Ratio (Current Assets/Current Liabilities)	1.9786
  Long term note will not affect current liability as long term note is long term liability/non current liability