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

Cash	$	73,000
Marketable securities	$	22,000
Accounts receivable, net	$	357,200
Inventory	$	467,800
Prepaid expenses	$	10,100
Accounts payable	$	205,400
Notes due within one year	$	106,000
Accrued liabilities	$	62,700

During the year, Denna Company completed the following transactions:

x.	Paid a cash dividend previously declared, $33,000.
a.	Issued additional shares of common stock for cash, $206,000.
b.	Sold inventory costing $72,400 for $103,000, on account.
c.	Wrote off uncollectible accounts in the amount of $11,200, reducing the accounts receivable balance accordingly.
d.	Declared a cash dividend, $33,000.
e.	Paid accounts payable, $104,800.
f.	Borrowed cash on a short-term note with the bank, $64,500.
g.	Sold inventory costing $15,840 for $10,560 cash.
h.	Purchased inventory on account, $52,250.
i.	Paid off all short-term notes due, $170,500.
j.	Purchased equipment for cash, $77,400.
k.	Sold marketable securities costing $12,000 for cash, $10,000.
l.	Collected cash on accounts receivable, $83,300.

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 b. Current ratio c. Acid-test ratio

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.

transaction	working capital	current ratio (effect on)	Acid-test Ratio
x. Paid a cash dividend previously declared	none	increase	increase
a. issued capital stock for cash
b. sold inventory for cash
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
h. purchased inventory on account
i. paid short-term notes due
j. purchased equipment for cash
k. sold marketable securities at a loss
l. collected accounts recievable