Effect of various transactions on financial statement ratios. Indicate the effects (increase, decrease, no effect) of the following independent transactions on (1) earnings per share, (2) working capital, and (3) the quick ratio, where accounts receivable are included but merchandise inventory is excluded from quick assets. Assume the quick ratio is \(1: 1\) before the transaction occurs. State any other necessary assumptions.

a. A firm sells for \(\$ 300,000\), on account, merchandise inventory costing \(\$ 240,000\).

b. A firm declares dividends of \(\$ 160,000\). It will pay the dividends during the next accounting period.

c. A firm purchases, on account, merchandise inventory costing \(\$ 410,000\).

d. A firm sells for \(\$ 20,000\) a machine costing \(\$ 80,000\) and with accumulated depreciation of \(\$ 60,000\).

e. Because of defects, a firm returns to the supplier merchandise inventory purchased for \(\$ 7,000\) cash. The firm receives a cash reimbursement.

f. A firm issues 10,000 shares of \(\$ 10\)-par value common stock on the last day of the accounting period for \(\$ 15\) per share. It uses the proceeds to acquire the assets of another firm composed of the following: accounts receivable, \(\$ 30,000\); merchandise inventory, \(\$ 60,000\); plant and equipment, \(\$ 100,000\). The acquiring firm also agrees to assume current liabilities of \(\$ 40,000\) of the acquired company.