Q1. A company had an average inventory last year of $199,000 and its inventory turnover was 5. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year?

Q2. A company has current assets of $82,000 (of which $37,000 is inventory and prepaid items) and current liabilities of $37,000. What is the current ratio? What is the acid-test ratio? If the company borrows $15,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be?

Q3. A company has current assets of $587,000 and current liabilities of $228,000. The board of directors declares a cash dividend of $170,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend?