1-On June 30, Year 3, Lincoln Jewelry Companys total current assets were $501,500 and its total current liabilities were $270,500. On July 1, Year 3, Lincoln issued a long-term note to a bank for $41,000 cash. Required (Show you work):

a. Compute Franklins working capital before and after issuing the note. Show your work.

b. Compute Franklins current ratio before and after issuing the note. Show your work.

2-The following information was drawn from the accounting records of Tough Toys Company. Based on this information the companys price-earnings ratio (SHOW YOUR WORK):

A. 12 to 1.

B. 10 to 1.

C. 2 to 1.

D. 5 to 1.

3-A low price to earnings ratio (P/E ratio) may suggest that:

A. a companys stock overvalued.

B. a companys future earnings are expected to decline.

C. a companys future earnings are expected to increase.

D. the price of a companys stock is equal to its book value.

Using 3 sentences, describe why you selected the answer that you chose

Net income Preferred stock outstanding, 12% cumulative Market price per share of common stock Common Stock outstanding Average number of common shares outstanding Common shares outstanding at end of accounting period Dividends per share on common stock $ 209,600 $ 80,000 $24.00 $1,240,000 100,000 shares 20,000 shares $0.50 per share