(Learning Objectives 4: Computing effects of business transactions on selected ratios) Financial statement data of Trinton Engineering include the following items:

❙ Requirements 1. Compute Trinton’s current ratio, debt ratio, and earnings per share.
2. Compute the three ratios after evaluating the effect of each transaction that follows.
Consider each transaction independently.

a. Borrowed €115,000 on a long-term note payable.

b. Issued 20,000 shares of ordinary shares, receiving cash of €365,000.

c. Paid short-term notes payable, €26,000.

d. Purchased merchandise of €45,000 on account, debiting Inventory.

e. Received cash on account, €19,000.