Individual transactions often have a significant impact on ratios. This problem will consider the direction of such an impact.

Total Total Net Current Current Working Current Assets Liabilities Capital Ratio

a. Cash is acquired through issuance of additional common stock. _______ _______ _______ _______

b. Merchandise is sold for cash. (Assume a profit.) _______ _______ _______ _______

c. A fixed asset is sold for more than book value. _______ _______ _______ _______

d. Payment is made to trade creditors for previous purchases. _______ _______ _______ _______

e. A cash dividend is declared and paid. _______ _______ _______ _______

f. A stock dividend is declared and paid. _______ _______ _______ _______ g. Cash is obtained through long-term bank loans. _______ _______ _______ _______ h. A profitable firm increases its fixed assets depreciation allowance account. _______ _______ _______ _______ i. Current operating expenses are paid. _______ _______ _______ _______ j. Ten-year notes are issued to pay off accounts payable. _______ _______ _______ _______ k. Accounts receivable are collected. _______ _______ _______ _______ l. Equipment is purchased with short-term notes. _______ _______ _______ _______ m. Merchandise is purchased on credit. _______ _______ _______ _______ n. The estimated taxes payable are increased. _______ _______ _______ _______ o. Marketable securities are sold below cost. _______ _______ _______ _______ Required Indicate the effects of the transactions listed above on each of the following:

total current assets, total current liabilities, net working capital, and current ratio. Use + to indicate an increase, − to indicate a decrease, and 0 to indicate no effect. Assume an initial current ratio of more than 1 to 1.