Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Data pertaining to the current position of Forte Company are as follows: Cash $447,500 Marketable securities 180,000 Accounts and notes receivable (net) 325,000 Inventories 700,000

Data pertaining to the current position of Forte Company are as follows:

Cash $447,500
Marketable securities 180,000
Accounts and notes receivable (net) 325,000
Inventories 700,000
Prepaid expenses 46,000
Accounts payable 210,000
Notes payable (short-term) 240,000
Accrued expenses 300,000
Required:
1. Compute (A) the working capital, (B) the current ratio, and (C) the quick ratio. Round ratios to one decimal place.
2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions, and record the results in the appropriate columns of the table provided. Consider each transaction separately and assume that only that transaction affects the data given. Round to one decimal place.
A. Sold marketable securities at no gain or loss, 60,000.
B. Paid accounts payable, 135,000.
C. Purchased goods on account, 105,000.
D. Paid notes payable, 100,000.
E. Declared a cash dividend, 140,000.
F. Declared a common stock dividend on common stock, 30,000.
G. Borrowed cash from bank on a long-term note, 200,000.
H. Received cash on account, 135,000.
I. Issued additional shares of stock for cash, 610,000.
J. Paid cash for prepaid expenses, 14,000.

X

Starting Questions

2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions, and record the results in the appropriate columns of the table provided. Consider each transaction separately and assume that only that transaction affects the data given. Round to one decimal place.

Working Current Quick
Transaction Capital Ratio Ratio
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Statistics For The Behavioural Sciences

Authors: Joan Welkowitz, Robert B. Ewen, Jacob Cohen

2nd Edition

0127432604, 9780127432601

More Books

Students also viewed these Accounting questions

Question

=+6. What five driving forces make CSR more relevant today?

Answered: 1 week ago