Homework Answers
| Current | Quick | Current | Current | Acide | working | |||
| Transaction | assets | Assets | liabilities | ratio | test ratio | capital | ||
| Beginning | 800,000 | 520000 | 400000 | 2 | 1.3 | 400,000 | ||
| 2-May | 55,000 | 55,000 | ||||||
| Balances | 855,000 | 520000 | 455000 | 1.88 | 1.14 | 400,000 | ||
| 8-May | 150,000 | 150,000 | ||||||
| -60,000 | ||||||||
| balances | 945,000 | 670000 | 455000 | 2.08 | 1.47 | 490,000 | ||
| 10-May | 24,000 | 24,000 | ||||||
| -24,000 | -24,000 | |||||||
| Balance | 945,000 | 670000 | 455000 | 2.08 | 1.47 | 490,000 | ||
| 15-May | -32,000 | -32,000 | -32,000 | |||||
| Balance | 913,000 | 638000 | 423000 | 2.16 | 1.51 | 490,000 | ||
| 17-May | 0 | 0 | 0 | |||||
| balance | 913,000 | 638000 | 423000 | 2.16 | 1.51 | 490,000 | ||
| 22-May | 0 | 0 | 62000 | |||||
| Balances | 913,000 | 638000 | 485000 | 1.88 | 1.32 | 428,000 | ||
| 26-May | -62,000 | -62,000 | -62000 | |||||
| Balances | 851,000 | 576000 | 423000 | 2.01 | 1.36 | 428,000 | ||
| 27-May | 110,000 | 110,000 | 110,000 | |||||
| Balances | 961,000 | 686000 | 533000 | 1.80 | 1.29 | 428,000 | ||
| 28-May | 125,000 | 125,000 | 0 | |||||
| Balances | 1,086,000 | 811000 | 533000 | 2.04 | 1.52 | 553,000 | ||
| Ma 29 | -235,000 | -235,000 | 0 | |||||
| Balances | 851,000 | 576000 | 533000 | 1.60 | 1.08 | 318,000 | ||
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Plum Corporation began the month of May with $800,000 of current assets, a current ratio of...
Plum Corporation began the month of May with $1,400,000 of current assets, a current ratio of...
Plum Corporation began the month of May with $1,400,000 of
current assets, a current ratio of 2.30:1, and an acid-test ratio
of 1.60:1. During the month, it completed the following
transactions (the company uses a perpetual inventory
system).
May
2
Purchased $55,000 of merchandise inventory on credit.
8
Sold merchandise inventory that cost $65,000 for $145,000
cash.
10
Collected $24,000 cash on an account receivable.
15
Paid $31,500 cash to settle an account payable.
17
Wrote off a $5,000 bad...
Plum Corporation began the month of May with $1,000,000 of current assets, a current ratio of...
Plum Corporation began the month of May with $1,000,000 of
current assets, a current ratio of 2.10:1, and an acid-test ratio
of 1.60:1. During the month, it completed the following
transactions (the company uses a perpetual inventory
system).
May
2
Purchased $75,000 of merchandise inventory on credit.
8
Sold merchandise inventory that cost $55,000 for $130,000
cash.
10
Collected $22,000 cash on an account receivable.
15
Paid $24,500 cash to settle an account payable.
17
Wrote off a $5,000 bad...
Plum Corporation began the month of May with $700,000 of current assets, a current ratio of...
Plum Corporation began the month of May with $700,000 of current assets, a current ratio of 2.10:1, and an acid-test ratio of 1.30:1. During the month, it completed the following transactions (the company uses a perpetual inventory system). 2 Purchased $60,000 of merchandise inventory on credit 8 Sold merchandise inventory that cost $60,000 for $130,000 cash. 10 Collected $27,000 cash on an account receivable 15 Paid $23,500 cash to settle an account payable 17 Wrote off a $5,000 bad debt...
Plum Corporation began the month of May with $1,400,000 of current assets, a current ratio of...
Plum Corporation began the month of May with $1,400,000 of
current assets, a current ratio of 2.70:1, and an acid-test ratio
of 1.60:1. During the month, it completed the following
transactions (the company uses a perpetual inventory system).
Plum Corporation began the month of May with $1.400,000 of current assets, a current ratio of 2.70:1, and an acid-test ratio of 1.60:1 During the month, it completed the following transactions (the company uses a perpetual inventory system). May 2 Purchased $75,88e...
Problem 13-3A Transactions, working capital, and liquidity ratios LO P3 Plum Corporation began the month of...
Problem 13-3A Transactions, working capital, and liquidity ratios LO P3 Plum Corporation began the month of May with $1,200,000 of current assets, a current ratio of 2.10:1, 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 $55,000 of merchandise inventory on credit. 8 Sold merchandise inventory that cost $55,000 for $125,000 cash. 10 Collected $30,000 cash on an account receivable. 15 Paid $31.000 cash to...
Stanley Company has current assets of $800,000 and current liabilities of $500,000. Stanley Company’s current ratio...
Stanley Company has current assets of $800,000 and current liabilities of $500,000. Stanley Company’s current ratio would be increased by: A. Collect cash of $100,000 from a customer on accounts receivable. B. Pay cash of $100,000 for a six-month note at maturity. C. Purchase of $100,000 of inventory on account. D. Purchase office supplies with cash of $100,000.
Norsk Optronics, ALS, of Bergen, Norway, had a current ratio of 2 on June 30 of...
Norsk Optronics, ALS, of Bergen, Norway, had a current ratio of 2 on June 30 of the current year. On that date, the company's assets were: Cash Accounts receivable, net Inventory Prepaid expenses Plant and equipment, net Total assets $ 80,000 400,000 660,000 10,000 1,860,000 $3,010,000 Required: 1. What was the company's working capital on June 30? 2. What was the company's acid-test ratio on June 30? (Round your answer to 2 decimal places.) 3. The company paid an account...
A company began the month with current assets $200k and $80k of current liabilities. Required: Review...
A company began the month with current assets $200k and $80k of current liabilities. Required: Review the following transactions. Indicate the effect they have on the corporation’s current ratio by placing an ‘X’ in the appropriate column. Treat each transaction independently. Increase Decrease No Effect a. Paid $10,000 of accounts payable with cash. b. Declared a $1 per share cash dividend on the 10,000 common shares that were outstanding. c. Paid a $10,000 dividend that was declared one month ago....
CP 13 – 6 In the left‐hand column, a series of independent transactions is listed; in the right‐hand column, a series of ratios is listed. Effect on ratio No Transaction Ratio Increase Decrease change...
CP 13 – 6 In the left‐hand column, a series of independent
transactions is listed; in the right‐hand column, a series of
ratios is listed. Effect on ratio No Transaction Ratio Increase
Decrease change Wrote‐off an uncollectible account receivable
Accounts receivable collection period Issued 10‐year bonds to
acquire plant assets Return on total assets Declared a stock
dividend on common shares Earnings per share Paid a current
creditor in full Acid‐test ratio Required: For each transaction
indicate whether the ratio...
Calculating the Current Ratio and the Quick (or Acid-Test) Ratio LoLo Lemon Company has current assets...
Calculating the Current Ratio and the Quick (or Acid-Test) Ratio LoLo Lemon Company has current assets equal to $500,000. Of these, $300,000 is cash, $75,000 is accounts receivable, $125,000 is inventory, and the remainder is marketable securities. Current liabilities total $425,000. Required: Note: Round answers to two decimal places. 1. Calculate the current ratio. 2. Calculate the quick ratio (acid-test ratio).
Plum Corporation began the month of May with $1,400,000 of
current assets, a current ratio of 2.30:1, and an acid-test ratio
of 1.60:1. During the month, it completed the following
transactions (the company uses a perpetual inventory
system).
May
2
Purchased $55,000 of merchandise inventory on credit.
8
Sold merchandise inventory that cost $65,000 for $145,000
cash.
10
Collected $24,000 cash on an account receivable.
15
Paid $31,500 cash to settle an account payable.
17
Wrote off a $5,000 bad...
Plum Corporation began the month of May with $1,000,000 of
current assets, a current ratio of 2.10:1, and an acid-test ratio
of 1.60:1. During the month, it completed the following
transactions (the company uses a perpetual inventory
system).
May
2
Purchased $75,000 of merchandise inventory on credit.
8
Sold merchandise inventory that cost $55,000 for $130,000
cash.
10
Collected $22,000 cash on an account receivable.
15
Paid $24,500 cash to settle an account payable.
17
Wrote off a $5,000 bad...
Plum Corporation began the month of May with $700,000 of current assets, a current ratio of 2.10:1, and an acid-test ratio of 1.30:1. During the month, it completed the following transactions (the company uses a perpetual inventory system). 2 Purchased $60,000 of merchandise inventory on credit 8 Sold merchandise inventory that cost $60,000 for $130,000 cash. 10 Collected $27,000 cash on an account receivable 15 Paid $23,500 cash to settle an account payable 17 Wrote off a $5,000 bad debt...
Plum Corporation began the month of May with $1,400,000 of
current assets, a current ratio of 2.70:1, and an acid-test ratio
of 1.60:1. During the month, it completed the following
transactions (the company uses a perpetual inventory system).
Plum Corporation began the month of May with $1.400,000 of current assets, a current ratio of 2.70:1, and an acid-test ratio of 1.60:1 During the month, it completed the following transactions (the company uses a perpetual inventory system). May 2 Purchased $75,88e...
Problem 13-3A Transactions, working capital, and liquidity ratios LO P3 Plum Corporation began the month of May with $1,200,000 of current assets, a current ratio of 2.10:1, 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 $55,000 of merchandise inventory on credit. 8 Sold merchandise inventory that cost $55,000 for $125,000 cash. 10 Collected $30,000 cash on an account receivable. 15 Paid $31.000 cash to...
Norsk Optronics, ALS, of Bergen, Norway, had a current ratio of 2 on June 30 of the current year. On that date, the company's assets were: Cash Accounts receivable, net Inventory Prepaid expenses Plant and equipment, net Total assets $ 80,000 400,000 660,000 10,000 1,860,000 $3,010,000 Required: 1. What was the company's working capital on June 30? 2. What was the company's acid-test ratio on June 30? (Round your answer to 2 decimal places.) 3. The company paid an account...
CP 13 – 6 In the left‐hand column, a series of independent
transactions is listed; in the right‐hand column, a series of
ratios is listed. Effect on ratio No Transaction Ratio Increase
Decrease change Wrote‐off an uncollectible account receivable
Accounts receivable collection period Issued 10‐year bonds to
acquire plant assets Return on total assets Declared a stock
dividend on common shares Earnings per share Paid a current
creditor in full Acid‐test ratio Required: For each transaction
indicate whether the ratio...
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