4 Problem 14-14 (Static) Effects of Transactions on Various Ratios [LO14-2] 12 points eflook References Denna Company's working capital accounts at the beginning of the year follow Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Accounts payable Notes due within one year Accrued liabilities: $50,000 $30,000 $ 200,000 $210,000 $10,000 $ 150,000 $ 30,000 $ 20,000 During the year, Denna Company completed the following transactions x. Paid a cash dividend previously declared, $12,000. a. Issued additional shares of common stock for cash, $100,000 b. Sold inventory costing $50,000 for $80,000, on account c. Wrote off uncollectible accounts in the amount of $10,000. reducing the accounts receivable balance accordingly d. Declared a cash dividend. $15,000 e. Paid accounts payable, $50,000. 1. Borrowed cash on a short term note with the bank, $35,000. g Sold inventory costing $15.000 for $10,000 cash hs. Purchased inventory on account, $60,000 1. Paid off all short-term notes due, $30,000. Purchased equipment for cash, $15,000 k. Sold marketable securities costing $18,000 for cash, $15.000 Collected cash on accounts receivable, $80,000 12 points eBook References Required: 1. Compute the following amounts and ratios as of the beginning of the year: a. Working capital. b. Current ratio. c. Acid-test ratio. 2. Indicate the effect of each of the transactions given above on working capital, the current ratio, and the acid-test ratio. Give the effect in terms of increase, decrease, or none. Item po is given as an example. Consider each transaction independently and indicate: their effects as compared to the ratios and amounts at the beginning of the period. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the following amounts and ratios as of the beginning of the year: (Round your ratios to 2 decimal places.) a Working capital b Current ratio c Acid test ratio Required 2 > 4 4 Complete this question by entering your answers in the tabs below. 12 points ebook References Required 1 Required 2 Indicate the effect of each of the transactions given above on working capital, the current ratio, and the acid-test ratio. Give the effect in terms of increase, decrease, or none. Item (x) is given as an example. Consider each transaction independently and indicate their effects as compared to the ratios and amounts at the beginning of the period. Transaction x. Paid a cash dividend previously declared The Effect on Working Capital None The Effect on Current Ratio Increase The Effect on Acid-Test Ratio Increase a Issued additional shares of common stock for cash b Sold inventory at a gain c Wrote off uncollectible accounts d Declared a cash dividend e Paid accounts payable 1 Borrowed on a short term note o Sold inventory at a loss h Purchased inventory on account Paid short term notes Purchased equipment for cash k Sold marketable securibes at a loss Collected accounts receivable