Chapter 14 Homework

Problem 14-14 Effects of Transactions on Various Ratios [LO14-2]

Denna Companys working capital accounts at the beginning of the year follow:

Cash	$	80,000
Marketable securities	$	24,100
Accounts receivable, net	$	374,000
Inventory	$	486,000
Prepaid expenses	$	15,000
Accounts payable	$	218,000
Notes due within one year	$	120,000
Accrued liabilities	$	69,000

During the year, Denna Company completed the following transactions:

Ex. Paid a cash dividend previously declared, $40,000.

1. Issued additional shares of common stock for cash, $220,000.
2. Sold inventory costing $78,000 for $110,000, on account.
3. Wrote off uncollectible accounts in the amount of $14,000, reducing the accounts receivable balance accordingly.
4. Declared a cash dividend, $40,000.
5. Paid accounts payable, $116,000.
6. Borrowed cash on a short-term note with the bank, $75,000.
7. Sold inventory costing $18,000 for $12,000 cash.
8. Purchased inventory on account, $57,500.
9. Paid off all short-term notes due, $195,000.
10. Purchased equipment for cash, $83,000.
11. Sold marketable securities costing $14,100 for cash, $11,750.
12. Collected cash on accounts receivable, $91,000.