Data pertaining to the current position of Forte Company follow: Cash $437,500 Marketable securities 170,000 Accounts and notes receivable (net) 320,000 Inventories 700,000 Prepaid expenses 42,000 Accounts payable 240,000 Notes payable (short-term) 250,000 Accrued expenses 310,000 Required: 1. Compute (A) the working capital, (B) the current ratio, and (C) the quick ratio. Round ratios to one decimal place. 2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns of the table provided. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place. A. Sold marketable securities at no gain or loss, $75,000. B. Paid accounts payable, $135,000. C. Purchased goods on account, $100,000. D. Paid notes payable, $105,000. E. Declared a cash dividend, $125,000. F. Declared a common stock dividend on common stock, $45,000. G. Borrowed cash from bank on a long-term note, $205,000. H. Received cash on account, $130,000. I. Issued additional shares of stock for cash, $635,000. J. Paid cash for prepaid expenses, $15,000. 1.Compute the following. Round ratios to one decimal place. A. Working capital: B. Current ratio: C. Quick ratio: 2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns of the table provided. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place. Working Current Quick Transaction Capital Ratio Ratio A. B. C. D. E. F. G. H. I. J.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Data pertaining to the current position of Forte Company follow:

Cash	$437,500
Marketable securities	170,000
Accounts and notes receivable (net)	320,000
Inventories	700,000
Prepaid expenses	42,000
Accounts payable	240,000
Notes payable (short-term)	250,000
Accrued expenses	310,000

Required:

Compute (A) the working capital, (B) the current ratio, and (C) the quick ratio. Round ratios to one decimal place.

Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns of the table provided. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.

A.	Sold marketable securities at no gain or loss, $75,000.
B.	Paid accounts payable, $135,000.
C.	Purchased goods on account, $100,000.
D.	Paid notes payable, $105,000.
E.	Declared a cash dividend, $125,000.
F.	Declared a common stock dividend on common stock, $45,000.
G.	Borrowed cash from bank on a long-term note, $205,000.
H.	Received cash on account, $130,000.
I.	Issued additional shares of stock for cash, $635,000.
J.	Paid cash for prepaid expenses, $15,000.

1.Compute the following. Round ratios to one decimal place.

A.	Working capital:
B.	Current ratio:
C.	Quick ratio:

2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns of the table provided. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.

	Working	Current	Quick
Transaction	Capital	Ratio	Ratio
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.

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