Effect of transactions on liquidity measures Selected balance sheet accounts for Tib...

Effect of transactions on liquidity measures Selected balance sheet accounts for Tibbetts Company on September 30, 2013, are as follows:

Required:

a. Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2013.

b. Summarized here are the transactions/events that took place during the fiscal year ended September 30, 2014. Indicate the effect of each item on Tibbetts Company’s working capital, current ratio, and acid-test ratio. Use 1 for increase, − for decrease, and (NE) for no effect. (Hint: It may be helpful to use the horizontal model or to record the journal entry(ies) for each item before considering the effects on liquidity measures.)