Effect of transactions on current position analysis OBJ. 2 Data pertaining to the current position of Lucroy Industries Inc. are as follows:

Cash $ 800,000 Marketable securities 550,000 Accounts and notes receivable (net) 850,000 Inventories 700,000 Prepaid expenses 300,000 Accounts payable 1,200,000 Notes payable (short-term) 700,000 Accrued expenses 100,000 Instructions 1. Compute

(a) the working capital,

(b) the current ratio, and

(c) the quick ratio. Round to one decimal place.

2. List the following captions on a sheet of paper:

Transaction Working Capital Current Ratio Quick Ratio Compute the working capital, the current ratio, and the quick ratio after each of the following transactions, and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given. Round to one decimal place.

a. Sold marketable securities at no gain or loss, $500,000.

b. Paid accounts payable, $287,500.

c. Purchased goods on account, $400,000.

d. Paid notes payable, $125,000.

e. Declared a cash dividend, $325,000.

f. Declared a common stock dividend on common stock, $150,000.
g. Borrowed cash from bank on a long-term note, $1,000,000.
h. Received cash on account, $75,000.
i. Issued additional shares of stock for cash, $2,000,000.
j. Paid cash for prepaid expenses, $200,000.