P12-54A. (Learning Objective 4: Computing effects of business transactions on selected ratios) Financial statement data of Greenland Engineering include the following items:

Requirements 1. Compute Greenland’s current ratio, debt ratio, and earnings per share. (Round all ratios to two decimal places.)
2. Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction independently.

a. Borrowed $130,000 on a long-term note payable.

b. Issued 40,000 ordinary shares, receiving cash of $400,000.

c. Paid short-term notes payable, $25,000.

d. Purchased merchandise of $48,000 on account, debiting Inventory.

e. Received cash on account, $14,000.
A1 345678 12 3456789 A B C AVN Limited Selected information from financial statements 20X7 20X6 Sales Cost of sales Receivables, net Inventory Payables $ 176,000 83,000 24,000 16,000 20,000 $ 150,000 73,000 18,000 12,000 16,000

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Cash 25,000 Accounts payable....... $101,000 Short-term investments.... 38,000 Accrued liabilities....... 37,000 Accounts receivable, net. 82,000 Long-term notes payable. 160,000 Inventories.. 149,000 Other long-term liabilities.... 37,000 Prepaid expenses. 6,000 Net income.......... 96,000 Total assets. 674,000 Number of ordinary Short-term notes payable............. 41,000 shares outstanding.......... 52,000