Effect of Transactions on Current Position Analysis Data pertaining to the current position of Lucroy Industries…

Effect of Transactions on Current Position Analysis
Data pertaining to the current position of Lucroy Industries
Inc. follow:

Cash
$442,500

Marketable securities
165,000

Accounts and notes receivable (net)
330,000

Inventories
700,000

Prepaid expenses
46,000

Accounts payable
210,000

Notes payable (short-term)
245,000

Accrued expenses
320,000

Required:
1. Compute (a) the working capital, (b) the
current ratio, and (c) the quick ratio. 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. Consider
each transaction separately and assume that only that
transaction affects the data given. Round ratios to one decimal
place.

Transaction
Working Capital
Current Ratio
Quick Ratio

a. Sold marketable securities at no gain or loss, $75,000.
$

b. Paid accounts payable, $130,000.

c. Purchased goods on account, $110,000.

d. Paid notes payable, $110,000.

e. Declared a cash dividend, $155,000.

f. Declared a common stock dividend on common stock,
$60,000.

g. Borrowed cash from bank on a long-term note, $210,000.

h. Received cash on account, $110,000.

i. Issued additional shares of stock for cash, $555,000.

j. Paid cash for prepaid expenses, $13,000.