As of December 31, Year 1, Gant 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, Year 2, Gant issued common stock at par value for $10,000 cash. Which of the following statements is true?
A. Gant's current ratio will decrease.
B. Gant's current ratio will increase.
C. Gant's working capital will decrease.
D. Gant's quick ratio will decrease.
Answer: B
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