6.

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 $ 63,000 $ 27,700 $ 333,200 $441,800 $ 6,600 $ 187,400 $ 86,000 $ 53,700 During the year. Denna Company completed the following transactions. Ex Paid a cash dividend previously declared, $23,000. a. Issued additional shares of common stock for cash, $186,000. b. Sold inventory costing $64,400 for $93,000, on account. c. Wrote off uncollectible accounts in the amount of $7,200, reducing the accounts receivable balance accordingly. d. Declared a cash dividend. $23,000. e Paid accounts payable, $88,800. f. Borrowed cash on a short-term note with the bank, $49,500. g. Sold inventory costing $21.600 for $14.400 cash h. Purchased inventory on account. $44.750, 1. Paid off all short-term notes due, $135,500. J. Purchased equipment for cash $69,400. k. Sold marketable securities costing $17,700 for cash. $14.750. 1. Collected cash on accounts receivable, $72,300. Required: 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 (Ex) 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. Book Working Capital None The Effect on Current Ratio Increase Acid-Test Ratio Increase Terences Transaction Ex Paid a cash dividend previously declared a Issued capital stock for cash b. Sold inventory at a gain c. Wrote off uncollectible accounts d: Declared a cash dividend Paid accounts payable Borrowed on a short-term note 9 Sold Inventory at a loss h Purchased inventory on account Paid short-term notes 1 Purchased equipment for cash Sold marketable securities at a loss Collected accounts receivable Band ME