Data pertaining to the current position of Around
Data pertaining to the current position of Around Town Clothing Co. are as follows:
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Cash
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$120,000
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Marketable securities
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56,000
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Accounts and notes receivable (net)
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185,000
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Inventories
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224,000
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Prepaid expenses
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9,000
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Accounts payable
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188,000
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Notes payable (short-term)
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55,000
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Accrued expenses
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26,000
|
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Instructions
1.        Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round to two decimal places.
2.        List the following captions on a sheet of paper:
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Transaction           Working Capital               Current Ratio              Quick Ratio
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Compute the working capital, the current ratio, and the quick ratio after each of the fol- lowing transactions, and record the results in the appropriate columns. Consider each trans- action separately and assume that only that transaction affects the data given above. Round to two decimal places.
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a.        Sold marketable securities at no gain or loss, $34,000.
b.       Paid accounts payable, $60,000.
c.        Purchased goods on account, $40,000.
d.       Paid notes payable, $20,000.
e.        Declared a cash dividend, $25,000.
f.        Declared a common stock dividend, $16,500.
g.       Borrowed cash from bank on a long-term note, $120,000.
h.       Received cash on account, $86,000.
i.         Issued additional shares of stock for cash, $100,000.
j.         Paid cash for prepaid expenses, $9,000.
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Answers
Status NEW
Posted 01 May 2017 09:05 AM
My Price 10.00
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Attachments
file 1493629438-1373225_1_636291922580697090_Current-Ratio-Transactions.xlsx preview (177 words )
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