Financial statement data of ABC Fencing, Inc., include the following items:

Requirements 1. Compute ABC Fencing’s current ratio, debt ratio, and earnings per share. Assume that the company had no preferred stock outstanding. Round all ratios to two decimal places.
2. Compute each of the same three ratios after evaluating the effect of each transaction that follows:

a. Purchased merchandise of $40,000 on account, debiting Inventory.

b. Issued 2,000 shares of common stock, receiving cash of $78,000.

c. Borrowed $78,000 on a long-term note payable.

d. Received cash on account, $18,000.

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Cash......... Short-Term Investments. Accounts Receivable, Net... Inventory... Prepaid Expenses.. Total Assets Short-Term Notes Payable Accounts Payable.... Accrued Liabilities. $ 21,000 25,000 102,000 121,000 15,000 660,500 45,000 106,000 44,000 Long-Term Notes Payable. 160,000 Other Long-Term Liabilities 37,000 Net Income 77,000 Number of Common Shares Outstanding 37,000