Question
A company began the month with current assets $200k and $80k of current liabilities. Required: Review the following transactions. Indicate the effect they have on
A company began the month with current assets $200k and $80k of current liabilities.
Required:
Review the following transactions. Indicate the effect they have on the corporations current ratio by placing an X in the appropriate column. Treat each transaction independently.
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a. | Paid $10,000 of accounts payable with cash. |
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b. | Declared a $1 per share cash dividend on the 10,000 common shares that were outstanding. |
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c. | Paid a $10,000 dividend that was declared one month ago. |
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d. | Borrowed $10,000 cash from a bank as a 60-day, 10% loan. |
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e. | Borrowed $25,000 cash from a bank as a 10-year mortgage on the plant. |
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f. | Repurchased $10,000 of common shares for $10,000 cash. |
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