As of December 31, 2012, Grove Corporation Had a Current

Multiple Choice

As of December 31, 2012, Grove Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, 2012, Grove purchased merchandise on account for $4,000. Which of the following statements is true?

A) Grove's current ratio will increase.
B) Grove's quick ratio will increase.
C) Grove's current ratio will decrease.
D) Grove's quick ratio will increase and its current ratio will decrease.