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

Cash	$	84,000
Marketable securities	$	25,300
Accounts receivable, net	$	383,600
Inventory	$	496,400
Prepaid expenses	$	17,800
Accounts payable	$	225,200
Notes due within one year	$	128,000
Accrued liabilities	$	72,600

During the year, Denna Company completed the following transactions:

x.	Paid a cash dividend previously declared, $44,000.
a.	Issued additional shares of common stock for cash, $228,000.
b.	Sold inventory costing $81,200 for $114,000, on account.
c.	Wrote off uncollectible accounts in the amount of $15,600, reducing the accounts receivable balance accordingly.
d.	Declared a cash dividend, $44,000.
e.	Paid accounts payable, $122,400.
f.	Borrowed cash on a short-term note with the bank, $81,000.
g.	Sold inventory costing $19,200 for $12,800 cash.
h.	Purchased inventory on account, $60,500.
i.	Paid off all short-term notes due, $209,000.
j.	Purchased equipment for cash, $86,200.
k.	Sold marketable securities costing $15,300 for cash, $12,750.
l.	Collected cash on accounts receivable, $95,400.

Required:

1.

Compute the following amounts and ratios as of the beginning of the year: (Round your ratios to 2 decimal places.)

a.	Working capital	$581,300
b.	Current ratio	2.37
c.	Acid-test ratio	1.16

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 (x) 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.

			The Effect on
	Transaction	Working Capital	Current Ratio	Acid-Test Ratio
x.	Paid a cash dividend previously declared	None	Increase	Increase
a.	Issued capital stock for cash	Increase	Increase	Increase
b.	Sold inventory at a gain	Increase	Increase
c.	Wrote off uncollectible accounts
d.	Declared a cash dividend
e.	Paid accounts payable
f.	Borrowed on a short-term note
g.	Sold inventory at a loss	Decrease	Decrease
h.	Purchased inventory on account
i.	Paid short-term notes
j.	Purchased equipment for cash
k.	Sold marketable securities at a loss	Decrease	Decrease	Decrease
l.	Collected accounts receivable