On October 31, 2015, Kato Companys total current assets were $80,000 and its total current liabilities were

Question:

On October 31, 2015, Kato Company’s total current assets were $80,000 and its total current liabilities were $20,000. On November 1, 2015, Kato bought manufacturing equipment for $10,000 cash.

Required
a. Compute Kato’s working capital before and after the equipment purchase.
b. Compute Kato’s current ratio before and after the equipment purchase.