2. c. Current ratio, 2.0 PR 17-3A Effect of transactions on current position analysis OBJ. 2 Data pertaining to the current position of Forte Company are as follows: Cash $412,500 Marketable securities 187,500 Accounts and notes receivable (net) 300,000 Inventories 700,000 Prepaid expenses 50,000 Accounts payable 200,000 Notes payable (short-term) 250,000 Accrued expenses 300,000 Instructions 1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round to one decimal place. Quick Ratio 840 Chapter 17 Financial Statement Analysis 2. Use the following captions on a sheet of paper Transaction Working Capital Current 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 bianco new and assume that only that transaction affects the data hen. Round to one decimal place. Sold marketable securities at no gain or loss, $70,000, hPuld accounts payable, $125,000. c. Purchased goods on account, $110,000, d. Paid notes payable, $100,000, e Declared a cash dividend, $150,000, 1. Declared a common stock dividend on common stock, $50,000, 8. Borrowed cash from bank on a long-term note, $225,000. h. Received cash on account, $125,000 i. Issued additional shares of stock for cash, $600,000. 1 Paid cash for prepaid expenses, $10,000. 081.22 and profitability A B C D E F G H 3 a. Working Capital = Current Assets $1,650,000 Current Liabilities $750,000 14 1. 15 16 17 18 19 Working Capital $900,000 20 b. Current Ratio 21 Current Assets Current Liabilities 22 23 $1,650,000 $750,000 24 25 Current Ratio II 2.2 C. Quick Ratio 11 Quick Assets Current Liabilities 26 27 28 29 30 31 32 33 34 35 36 $900.000 $750.000 Quick Ratio 1.2 Pr. 17-3A 1 Desech O E Transaction Current Assets Quick Assets Current Liabilities Working Capital Quick Current Ratio Ratio 37 2. 38 39 40 41 42 $ 1.650,000 $ 900,000 s 750,000 22 24 $ 900.000 s S 1650.000 1,650,000 $ $ 900,000 900.000 $ 900,000 900,000 900,000 900,000 750,000 900,000 1.125.000 400.000 1,500,000 900,000 12 12 1.0 1.2 10 1.2 15 12 S NNNNNN $ 44 45 45 47 48 49 50 51 52 1,650,000 $ 900,000 750,000 750,000 750 000 750,000 750,000 CASAS 20 $ 1.650.000 12