Halifax Fisheries Inc. began the month of March with $760,000 of current assets, a current ratio of

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Halifax Fisheries Inc. began the month of March with $760,000 of current assets, a current ratio of 2.5 to 1, and a quick ratio of 1.1 to 1. During the month, it completed the following transactions:

Mar. 6 Bought $86,000 of merchandise on account. (The company uses a perpetual inventory system.)
11 Sold merchandise that cost $70,000 for $118,000.
15 Collected a $30,000 account receivable.
17 Paid a $32,000 account payable.
19 Wrote off a $14,000 bad debt against Allowance for Doubtful Accounts.
24 Declared a $1.75 per share cash dividend on the 41,000 outstanding common shares.
28 Paid the dividend declared on March 24.
29 Borrowed $90,000 by giving the bank a 30-day, 19% note.
30 Borrowed $110,000 by signing a long-term secured note.
31 Used the $200,000 proceeds of the notes to buy additional machinery.


Required

Prepare a schedule showing Halifax Fisheries Inc.’s current ratio, quick ratio, and working capital after each of the transactions. Round calculations to two decimal places.


Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Fundamental Accounting Principles Volume II

ISBN: 978-1260305838

16th Canadian edition

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

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