Homework Answers
|
1- |
No effect |
because there is no change in total of current assets |
|
2- |
no effect |
As total of current assets and current liabilities are reduced |
|
3- |
no effect |
if bank loan is current liability then there is no change |
|
4- |
decrease |
As total of current assets will decrease due to payment is made in cash |
|
5- |
no effect |
because there is no change in total of current assets |
|
6- |
Increase |
As inventory is sold with profit so either cash or accounts receivable will increase by more than the value of inventory reduced |
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2A.1 What effect would the following actions have on a firm's current ratio? Assume that net...
Question: What effect would the following actions have on Philippe Corporation’s current ratio? Provide your reasoning....
Question: What effect would the following actions have on
Philippe Corporation’s current ratio? Provide your reasoning.
a. Starting 2015 Current Ratio = _________________
b. $100 Inventory is purchased with cash.
c. A supplier is paid $100 with cash.
d. A short-term bank loan of $100 is repaid with cash.
e. A long-term debt of $100 is paid off early.
f. A customer pays off a credit account of $100.
g. Inventory is sold for $100 at cost.
h. Inventory is...
Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are...
Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are taken from the records of Redon Corp.: Cash Short-term investments Accounts receivable Inventory Prepaid Insurance Accounts payable Taxes payable Salaries and wages payable Short-term loans payable Required: $69,000 58,000 72,000 100,000 10,000 75,000 25,000 40,000 210,000 1. Use the information provided to compute the amount of working capital and Redon's current and quick ratios (round to three decimal points). Use the minus sign to...
Required ndicate the effect of each of the following transactions on (1) the current ratio, (2)...
Required ndicate the effect of each of the following transactions on (1) the current ratio, (2) working capital, (3) stockholders' equity. (4) book value per share of common stock, and (5) retained earnings. Assume that the current ratio is greater than 1:1. (Indicate the effect of each transactions by selecting"" for increase, "-" for decrease, and "NC" for no change.) a. Collected account receivable. b. Wrote off account receivable. c. Converted a short-term note payable to a long-term note payable....
Determine the effect on the current ratio, quick ratio, net working capital (current assets minus current...
Determine the effect on the current ratio, quick ratio, net working capital (current assets minus current liabilities), the debt ratio (total liabilities to total assets) of each of the following transactions. Consider each transaction seperately and assume that prior to each transaction the current ratio is 1.8x, the quick ratio is 1.5x, and the debt ratio is 75%. Think about what is included in each portion of the ratio. Use "I" for increase, "D" for decrease, and "N" for no...
Trect of Transactions on Debt-to-Equity Ratio The following account balances are taken from the records of...
Trect of Transactions on Debt-to-Equity Ratio The following account balances are taken from the records of Monet's Garden Inc.: Current liabilities Long-term abilities Stockholders' equity $150,000 375.000 400,000 Required: 1. Use the information provided to compute Monet's debt-to-equity ratio. Round to three decimal points. to 1 2. Determine the effect that each of the following transactions will have on Monet's debt-to-equity ratio by recalculating the ratio and then indicating whether the ratio is increased, decreased, or not affected by the...
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...
Effect of Transactions on Current Position Analysis Data pertaining to the current position of Newlan Company...
Effect of Transactions on Current Position Analysis Data pertaining to the current position of Newlan Company are as follows: Cash $284,900 Temporary investments 146,700 Accounts and notes receivable (net) 431,600 Inventories 315,400 Prepaid expenses 16,600 Accounts payable 116,200 Notes payable (short-term) 166,000 Accrued expenses 49,800 Instructions: 1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round the current ratio and the quick ratio to one decimal place. Working capital $ Current ratio Quick ratio...
Effect of Transactions on Current Position Analysis Data pertaining to the current position of Newlan Company...
Effect of Transactions on Current Position Analysis Data pertaining to the current position of Newlan Company are as follows: Cash $258,500 Temporary investments 133,100 Accounts and notes receivable (net) 391,600 Inventories 304,400 Prepaid expenses 16,000 Accounts payable 124,600 Notes payable (short-term) 178,000 Accrued expenses 53,400 Instructions: 1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round the current ratio and the quick ratio to one decimal place. Working capital $ Current ratio Quick ratio...
Effect of Transactions on Current Position Analysis Data pertaining to the current position of Newlan Company...
Effect of Transactions on Current Position Analysis Data pertaining to the current position of Newlan Company are as follows: Cash $328,700 Temporary investments 169,300 Accounts and notes receivable (net) 498,000 Inventories 425,800 Prepaid expenses 22,400 Accounts payable 174,300 Notes payable (short-term) 249,000 Accrued expenses 74,700 Instructions: 1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round the current ratio and the quick ratio to one decimal place. (I answered this question already) Working capital...
Which one of the following events does not have any impact on total working capital? A...
Which one of the following events does not have any impact on total working capital? A cash dividend to be paid next month is declared. Warranty expense is accrued. Salaries previously accrued are paid. Debt which was previously long-term matures next year. Question 12 If the current ratio is currently greater than 1.0,which one of the following events would increase the current ratio? Purchase of inventory on account Receipt of money from a customer prior to the performance of service...
Question: What effect would the following actions have on
Philippe Corporation’s current ratio? Provide your reasoning.
a. Starting 2015 Current Ratio = _________________
b. $100 Inventory is purchased with cash.
c. A supplier is paid $100 with cash.
d. A short-term bank loan of $100 is repaid with cash.
e. A long-term debt of $100 is paid off early.
f. A customer pays off a credit account of $100.
g. Inventory is sold for $100 at cost.
h. Inventory is...
Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are taken from the records of Redon Corp.: Cash Short-term investments Accounts receivable Inventory Prepaid Insurance Accounts payable Taxes payable Salaries and wages payable Short-term loans payable Required: $69,000 58,000 72,000 100,000 10,000 75,000 25,000 40,000 210,000 1. Use the information provided to compute the amount of working capital and Redon's current and quick ratios (round to three decimal points). Use the minus sign to...
Required ndicate the effect of each of the following transactions on (1) the current ratio, (2) working capital, (3) stockholders' equity. (4) book value per share of common stock, and (5) retained earnings. Assume that the current ratio is greater than 1:1. (Indicate the effect of each transactions by selecting"" for increase, "-" for decrease, and "NC" for no change.) a. Collected account receivable. b. Wrote off account receivable. c. Converted a short-term note payable to a long-term note payable....
Trect of Transactions on Debt-to-Equity Ratio The following account balances are taken from the records of Monet's Garden Inc.: Current liabilities Long-term abilities Stockholders' equity $150,000 375.000 400,000 Required: 1. Use the information provided to compute Monet's debt-to-equity ratio. Round to three decimal points. to 1 2. Determine the effect that each of the following transactions will have on Monet's debt-to-equity ratio by recalculating the ratio and then indicating whether the ratio is increased, decreased, or not affected by the...
Which one of the following events does not have any impact on total working capital? A cash dividend to be paid next month is declared. Warranty expense is accrued. Salaries previously accrued are paid. Debt which was previously long-term matures next year. Question 12 If the current ratio is currently greater than 1.0,which one of the following events would increase the current ratio? Purchase of inventory on account Receipt of money from a customer prior to the performance of service...
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