A condensed comparative balance sheet for a company appears below:

                              12-31-Year 1    12-31-Year 2

Cash                            $40,000        $30,000

Accounts receivable             120,000        100,000

Inventory                       200,000         300,000

Property, plant & equipment     500,000        550,000

Accumulated depreciation       (280,000)      (340,000)

Total assets                    $580,000        $640,000

Current liabilities                $60,000        $100,000

Long-term liabilities             390,000        420,000

Stockholders' equity             130,000        120,000

Total liabilities and equity       $580,000       $640,000

In looking at liquidity ratios at both balance sheet dates, what happened to the (1) current ratio and (2) acid-test (quick) ratio?

A. (1) Decreased (2) Increased

B. (1) Increased (2) Increased

C. (1) Increased (2) Decreased

D. (1) Decreased (2) Decreased