Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 13, Problem 3PSA
Summary Introduction
Concept Introduction:
Financial ratios: Ratio helps investor and the company to analyze the growth of the business. It helps to take decisions to management of business and helps investor in taking the decision of investment. Financial ratio also helps to compare the company with previous data and from other companies.
To Calculate:
Complete the table.
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Plum Corporation began the month of May with $1,400,000 of current assets, a current ratio of 2.00:1, and an acid-test ratio of 1.70:1.
During the month, it completed the following transactions (the company uses a perpetual inventory system).
May 2 Purchased $65,000 of merchandise inventory on credit.
May 8 Sold merchandise inventory that cost $55,000 for $140,000 cash.
May 10 Collected $26,000 cash on an account receivable.
May 15
Paid $29,500 cash to settle an account payable.
May 17
Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.
May 22 Declared a $1 per share cash dividend on its 62,000 shares of outstanding common stock.
May 26 Paid the dividend declared on May 22.
May 27 Borrowed $100,000 cash by giving the bank a 30-day, 10 % note.
May 28 Borrowed $120,000 cash by signing a long-term secured note.
May 29 Used the $220,000 cash proceeds from the notes to buy new machinery.
Required:
Complete the table below showing Plum's (1) current ratio, (2)…
Plum Corporation began the month of May with $1,200,000 of current assets, a current ratio of 2.50:1, and
an acid - test ratio of 1.40:1. During the month, it completed the following transactions (the company uses a
perpetual inventory system). May 2 Purchased $70,000 of merchandise inventory on credit. May 8 Sold
merchandise inventory that cost $45,000 for $130,000 cash. May 10 Collected $26,000 cash on an account
receivable. May 15 Paid $30,000 cash to settle an account payable. May 17 Wrote off a $5,000 bad debt
against the Allowance for Doubtful Accounts account. May 22 Declared a $1 per share cash dividend on its
67,000 shares of outstanding common stock. May 26 Paid the dividend declared on May 22. May 27
Borrowed $115,000 cash by giving the bank a 30-day, 10% note. May 28 Borrowed $140,000 cash by
signing a long-term secured note. May 29 Used the $255,000 cash proceeds from the notes to buy new
machinery. Required: Complete the table below showing Plum's (1) current ratio, (2)…
Plum Corporation began the month of May with $700,000 of current assets, a
current ratio of 2.50:1, and an acid-test ratio of 1.10:1. During the month, it
completed the following transactions (the company uses a perpetual inventory
system). May 2 Purchased $50,000 of merchandise inventory on credit. May 8 Sold
merchandise inventory that cost $55,000 for $110,000 cash. May 10 Collected $20,000
cash on an account receivable. May 15 Paid $22,000 cash to settle an account
payable. May 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful
Accounts account. May 22 Declared a $1 per share cash dividend on its 50,000
shares of outstanding common stock. May 26 Paid the dividend declared on May
22. May 27 Borrowed $100,000 cash by giving the bank a 30-day, 10% note. May 28
Borrowed $80,000 cash by signing a long-term secured note. May 29 Used the $
180,000 cash proceeds from the notes to buy new machinery. Required: Complete
the table below showing Plum's (1) current ratio, (2)…
Chapter 13 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
Ch. 13 - Explain the difference between financial reporting...Ch. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQ
Ch. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Prob. 13DQCh. 13 - Prob. 14DQCh. 13 - Prob. 15DQCh. 13 - Prob. 16DQCh. 13 - Prob. 17DQCh. 13 - Prob. 1QSCh. 13 - Prob. 2QSCh. 13 - Prob. 3QSCh. 13 - Prob. 4QSCh. 13 - Prob. 5QSCh. 13 - Prob. 6QSCh. 13 - Prob. 7QSCh. 13 - Prob. 8QSCh. 13 - Which of the following gains or losses would...Ch. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Prob. 10ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Prob. 1PSACh. 13 - Prob. 2PSACh. 13 - Prob. 3PSACh. 13 - Prob. 5PSACh. 13 - Prob. 6PSACh. 13 - Selected comparative financial statements of...Ch. 13 - Prob. 2PSBCh. 13 - Prob. 3PSBCh. 13 - Prob. 5PSBCh. 13 - Prob. 6PSBCh. 13 - Prob. 13SPCh. 13 - Prob. 2FSACh. 13 - Prob. 3FSACh. 13 - Prob. 1BTNCh. 13 - Prob. 5BTN
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