2. Determine the effect that each of the following transactions will have on Liquiform's working capital, current ratio, and quick ratio by recalculating each and then indicating whether the measure is increased, decreased, or not affected by the transaction. Consider each transaction independently; that is, assume that it is the only transaction that takes place.

Enter all amounts as positive numbers. For the ratios, round to three decimal places.

Working Capital Effect on Working Capital Effect on Current Ratio Effect on Quick Ratio Transaction Current Ratio Quick Ratio 120,000 none 1.55 X to 1 decrease 0.52 X to 1 decrease a. Purchased inventory on account, $20,000 b. Purchased inventory for cash, $15,000 120,000 none 1.60 to 1 none 1.60 X to 1 decrease C. Paid suppliers on account, $30,000 120,000 none 1.71X to 1 increase 1.06X to 1 increase d. Received cash on account, $40,000 120,000 none 1.60 to 1 none 1.05 to 1 none e. $ e. Paid insurance for next year, $20,000 120,000 none 1.60 to 1 none 0.95 to 1 decrease f. Made sales on account, $60,000 $ 180,000 increase 1.90 to 1 increase 1.35 to 1 increase g. Repaid short-term loans at bank, $25,000 120,000 none 1.69 X to 1 increase 1.06 X to 1 increase h. Borrowed 540,000 at bank for 90 days $ 120,000 none 1.50 to 1 decrease 1.04 x to 1 decrease i. Declared and paid $45,000 cash dividend 75,000 decrease TT 0.38X to 1 decrease 0.83 X to 1 decrease j. Purchased $20,000 of short-term investments $ 120,000 none 1.60 to 1 none : 1.05 to 1 none k. Paid $30,000 in salaries S 90,000 decrease 1.45 to 1 decrease 0.90 to 1 decrease I. Accrued additional $15,000 in taxes 105,000 decrease 1.49 X to 1 X decrease 0.98 X to 1 decrease