Park Corporation began the month of May with $650,000 of current assets, a current ratio of 2.50:1,

Question:

Park Corporation began the month of May with $650,000 of current assets, a current ratio of 2.50:1, and an acid-test ratio of 1.10:1. 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 $58,000 for $103,000 cash.

10 Collected $19,000 cash on an account receivable.

15 Paid $21,000 cash to settle an account payable.

17 Wrote off a $3,000 bad debt against the Allowance for Doubtful Accounts account.

22 Declared a $1 per share cash dividend on its 40,000 shares of outstanding common stock.

26 Paid the dividend declared on May 22.

27 Borrowed $75,000 cash by giving the bank a 30-day, 10% note.

28 Borrowed $90,000 cash by signing a long-term secured note.

29 Used the $165,000 cash proceeds from the notes to buy new machinery.

Required

Prepare a table showing Park’s

(1) Current ratio,

(2) Acid-test ratio, and

(3) Working capital, after each transaction. Round ratios to two decimals

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