Question: Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.8? Do not round intermediate calculations. Round your answer to the nearest dollar.

Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.8? Do not round intermediate calculations. Round your answer to the

Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.8? Do not round intermediate calculations. Round your answer to the nearest dollar. $ Presentcurrentratio=$460,000$1,196,000=2.6.Minimumcurrentratio=$460,000+NP$1,196,000+NP=2.0.$$1,196,000+NP=$920,000+2.0NPNP=$276,000. Short-term debt can increase by a maximum of $276,000 without violating a 2 to 1 current ratio, assuming that the entire increase in notes payable is used to increase current assets. Since we assumed that the additional funds would be used to increase inventory, the inventory account will increase to $596,000, and current assets will total $1,472,000. Quick ratio =($1,472,000$596,000)/$736,000=$876,000/$736,000=1.19

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