Question: Gates, Incorporated and Markham, Incorporated each had the same financial position on January 1, Year 2. The following is a summary of each of their

Gates, Incorporated and Markham, Incorporated each had the same financial position on January 1, Year 2. The following is a summary of each of their balance sheets on that date:

Current assets	$ 330,000
Non-current assets	2,970,000
Current liabilities	165,000
Non-current liabilities	1,815,000
Common stock	907,500
Retained earnings	412,500

Gates is about to raise $200,000 in cash by issuing bonds. Markham is going to raise $200,000 on the same day by issuing common stock. Immediately after these transactions, which of the following statements will be correct?

Multiple Choice

Gates' current ratio will be higher than Markham's.

Gates' current ratio will be lower than Markham's.

Gates' debt-to-assets ratio will be higher than Markham's.

Gates' debt-to-assets ratio will be lower than Markham's.

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