Data pertaining to the current position of Lucroy Industries Inc. follow:Cash $ 800,000Marketable securities 550,000Accounts and notes receivable (net) 850,000Inventories 700,000Prepaid expenses 300,000Accounts payable 1,200,000Notes payable (short-term) 700,000Accrued expenses 100,000Instructions1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round ratios in parts b through j to one decimal place.2. List the following captions on a sheet of paper:Transaction Working Capital Current Ratio Quick RatioCompute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given.Round to one decimal place.a. Sold marketable securities at no gain or loss, $500,000.b. Paid accounts payable, $287,500.c. Purchased goods on account, $400,000.d. Paid notes payable, $125,000.e. Declared a cash dividend, $325,000.f. Declared a common stock dividend on common stock, $150,000.g. Borrowed cash from bank on a long-term note, $1,000,000.h. Received cash on account, $75,000.i. Issued additional shares of stock for cash, $2,000,000.j. Paid cash for prepaid expenses, $200,000.
Data pertaining to the current position of Lucroy Industries Inc. follow:
Cash $ 800,000
Marketable securities 550,000
Accounts and notes receivable (net) 850,000
Inventories 700,000
Prepaid expenses 300,000
Accounts payable 1,200,000
Notes payable (short-term) 700,000
Accrued expenses 100,000
Instructions
1. Compute (a) the
2. List the following captions on a sheet of paper:
Transaction Working Capital Current Ratio Quick Ratio
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. Consider each transaction separately and assume that only that transaction affects the data given.Round to one decimal place.
a. Sold marketable securities at no gain or loss, $500,000.
b. Paid accounts payable, $287,500.
c. Purchased goods on account, $400,000.
d. Paid notes payable, $125,000.
e. Declared a cash dividend, $325,000.
f. Declared a common stock dividend on common stock, $150,000.
g. Borrowed cash from bank on a long-term note, $1,000,000.
h. Received cash on account, $75,000.
i. Issued additional shares of stock for cash, $2,000,000.
j. Paid cash for prepaid expenses, $200,000.
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