Porter Products Recognizes Expenses for Wages, Interest and Rent When

Essay

Porter Products recognizes expenses for wages, interest and rent when cash payments are made. The following related cash payments were made during December 2009:
As of December 31, the current assets and current liabilities reported on Porter's balance sheet were $36,000 and $22,500, respectively. Porter's income statement reported net income of $11,250.
Required: Compute Porter's current ratio and net income if the company were to account for wages, interest, and rent on an accrual basis.