Fad Foods Ltd completed a series of transactions, which are listed below. Before the transactions, both the current and quick asset ratios were greater than 1. The cash account has a debit balance. Indicate the effect of each of the transactions listed below on the ratio listed opposite it. For each transaction, state whether the ratio would increase, decrease or have no effect. Treat each transaction independently. Transaction1 Redeemed debentures by issuing ordinary shares2 Purchased inventory on credit34567Sold inventory for cash with a 40 per cent mark-up on costIssued additional ordinary shares for cashCollected an account receivable balancePaid accounts payablePaid accounts payableRatioReturn on equityQuick ratioCurrent ratioDebt-to-equity ratioDebtors turnoverReturn on assetsProfit margin

Name: Fad Foods Ltd completed a series of transactions, which are listed bel
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Description: Fad Foods Ltd completed a series of transactions, which are listed below. Before the transactions, both the current and quick asset ratios were greater than 1. The cash account has a debit balance. Indicate the effect of each of the transactions list

Since the question contains multiple independent transactions, we will do the first three…

Business

Accounting

1 2 3 Transaction Redeemed debentures by issuing ordinary shares Purchased inventory on credit Sold inventory for cash with a 40 per cent mark-up on cost Ratio Return on equity Quick ratio Current ratio

1 2 3 Transaction Redeemed debentures by issuing ordinary shares Purchased inventory on credit Sold inventory for cash with a 40 per cent mark-up on cost Ratio Return on equity Quick ratio Current ratio

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 16P: Ratios Analyses: McCormick Refer to the information for McCormick above. Additional information for...

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