1. Decisions made by management affect the ratios used to measure liquidity and solvency. Below are some transactions. Show how each would affect the stated ratio. Assume that each ratio is greater than 1 before the action is undertaken. please show a process how to do it

Decisions made by management affect the ratios used to measure liquidity and solvency. Below are some transactions. Show how each would affect the stated ratio. Assume that each ratio is greater than 1 before the action is undertaken. Action Current Ratio Acid-Test Ratio Debt-to- Equity Ratio 1. Payment of accounts payable 2. Purchase of inventory on account 3. Purchase of inventory with cash 4. Payment of bonds at maturity with sinking fund 5. Issuance of common stock for cash 6. Pay utilities expense 7. Purchase trading security with cash Payment of accounts payable if the ratios are less than 1 8