On May 1, 2020, Christina Fashions borrowed $96,000 at a bank by signing a four-year, 6%...

  

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On May 1, 2020, Christina Fashions borrowed $96,000 at a bank by signing a four-year, 6% loan. The terms of the loan require equal principal payments of $24,000 and accrued interest at 6% due annually on April 30. The loan agreement requires the company to maintain a minimum current ratio of 2.0. The December 31, 2020, year-end statement of financial position, immediately prior to the reclassification of long-term debt, follows: Current assets $120,000 Current liabilities $50,000 Non-current assets 178.000 Loan payable 96,000 Common shares 72.000 Retained earnings 80,000 Total liabilities and Total assets $298,000 shareholders' equity $298,000 Does Christina Fashions comply with the bank's current ratio requirement prior to recording the accrued interest and reclassification of the current portion of the long-term loan? (Round answer to 1 decimal place, e.g. 1.2.) Current ratio Christina Fashions does not meet meets eTextbook and Media List of Accounts the bank's minimum current ratio. On May 1, 2020, Christina Fashions borrowed $96,000 at a bank by signing a four-year, 6% loan. The terms of the loan require equal principal payments of $24,000 and accrued interest at 6% due annually on April 30. The loan agreement requires the company to maintain a minimum current ratio of 2.0. The December 31, 2020, year-end statement of financial position, immediately prior to the reclassification of long-term debt, follows: Current assets $120,000 Current liabilities $50,000 Non-current assets 178.000 Loan payable 96,000 Common shares 72.000 Retained earnings 80,000 Total liabilities and Total assets $298,000 shareholders' equity $298,000 Does Christina Fashions comply with the bank's current ratio requirement prior to recording the accrued interest and reclassification of the current portion of the long-term loan? (Round answer to 1 decimal place, e.g. 1.2.) Current ratio Christina Fashions does not meet meets eTextbook and Media List of Accounts the bank's minimum current ratio.