Effect of Transactions on Current Position Analysis
Data pertaining to the current position of Lucroy Industries
Accounts and notes receivable (net)
Notes payable (short-term)
1. Compute (a) the working capital, (b) the
current ratio, and (c) the quick ratio. Round ratios to one decimal
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
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,
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.