Financial statement data of Xi Supplies Inc. as at December 31, 2017, include the following items:

Cash ..........................................................$ 53,000

Accounts receivable, net .................................. 127,000

Inventories .................................................. 251,000

Prepaid expenses .......................................... 10,000

Total assets ................................................ 922,000

Short-term notes payable ................................. 80,000

Accounts payable ......................................... 91,000

Accrued liabilities ........................................ 64,000

Long-term liabilities ...................................... 248,000

Net income ................................................. 147,000

Number of common shares outstanding .............. 44,000

Required

1. Compute Xi Supplies Inc.'s current ratio, debt ratio, and earnings per share. Round all ratios to two decimal places.

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

a. Borrowed $100,000 on a long-term note payable.

b. Issued 12,000 common shares on January 2, 2018, receiving cash of $180,000.

c. Received cash on account, $29,000.

d. Paid short-term notes payable, $50,000.

e. Purchased merchandise costing $62,000 on account, debiting Inventory.

f. Paid long-term liabilities, $15,000.

g. Declared, but did not pay, a $40,000 cash dividend on the common shares. Set up a table in the following format for your answers:

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Transaction Current Ratio Debt Ratio Earnings per Share