The following are operating transactions that occurred during the current year. Analyze each transaction and explain if the transaction will increase, decrease, or have no effect on working capital.

a. Company purchased inventory on account, $5,800; terms 2/10, n/30.

b. Company borrowed $55,000 on a long-term note.

c. Old equipment with a book value of $2,200 was sold for $1,325.

d. Marketable securities were sold at a gain of $4,800.

e. Company paid $4,200 for insurance covering 1 year from the date of purchase.

LO1