Use the Information That Follows Taken from Campbell Company's Financial

Multiple Choice

Use the information that follows taken from Campbell Company's financial statements for the years ending December 31, 2017 and 2016.
$\begin{array}{lrr}\text { Balance Sheet Information }&2017&2016\\\hline \text { Assets}\\\text { Cash } & \$ 25 & \$ 50 \\\text { Accounts receivable } & 60 & 70 \\\text { Inventory } & 40 & 30 \\\text { Land, building, and equipment } & \underline{225} & \underline{250} \\\text { Total Assets } & \$ \underline{350} & \$ \underline{400} \\\end{array}$

$\begin{array}{l}\text { Liabilities and Shareholders' Equity }\\\hline \text { Accounts payable } & \$ 85 & \$ 100 \\\text { Long term note payable } & 180 & 200 \\\text { Common stock } & 150 & 150 \\\text { Retained earnings } & \underline{(65) } &\underline{ (50) } \\\text { Total Liabilities \& Shareholders' Equity }& \underline{\$ 350 }& \underline{\$ 400 }\\\end{array}$

$\begin{array}{lr}\text { Income Statement Information }\\\text { Sales (all sales are on credit) } & \$ 850 \\\text { Cost of goods sold } & \underline{425} \\\text { Gross profit } & {425}\\\text { Operating expenses } & \underline{ 440} \\\text { Net income } &\$(15) \end{array}$
Calculate Campbell's current and quick ratios as of December 31, 2016 and December 31, 2017 and choose the correct answers below:

A) Campbell's quick and current ratios improved from December 31, 2016 to December 31, 2017.
B) Campbell's quick and current ratios worsened from December 31, 2016 to December 31, 2017.
C) Campbell's quick ratio improved but the current ratio worsened December 31, 2016 to December 31, 2017.
D) Campbell's quick ratio worsened but the current ratio improved from December 31, 2016 to December 31, 2017.