Effects of business transactions on selected ratios [30—40 min] Financial statement dat...

Effects of business transactions on selected ratios [30—40 min]

Financial statement data of Yankee Traveler Magazine Include the following items (dollars in thousands):

Requirements

1. Compute Yankee Traveler’s current ratio, debt ratio, and earnings per share. Round all ratios to two decimal places, and use the following format for your answer:

2. Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction, a-d, separately.

Purchased inventory of $48,000 on account

b. Borrowed $121,000 on a long-term note payable

c. Issued 7,000 shares of common stock, receiving cash of $107,000

d. Received cash on account, $2,000