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

Cash	$	63,000
Marketable securities	$	27,700
Accounts receivable, net	$	333,200
Inventory	$	441,800
Prepaid expenses	$	6,600
Accounts payable	$	187,400
Notes due within one year	$	86,000
Accrued liabilities	$	53,700

During the year, Denna Company completed the following transactions:

x.	Paid a cash dividend previously declared, $23,000.
a.	Issued additional shares of common stock for cash, $186,000.
b.	Sold inventory costing $64,400 for $93,000, on account.
c.	Wrote off uncollectible accounts in the amount of $7,200, reducing the accounts receivable balance accordingly.
d.	Declared a cash dividend, $23,000.
e.	Paid accounts payable, $88,800.
f.	Borrowed cash on a short-term note with the bank, $49,500.
g.	Sold inventory costing $19,830 for $13,220 cash.
h.	Purchased inventory on account, $44,750.
i.	Paid off all short-term notes due, $135,500.
j.	Purchased equipment for cash, $69,400.
k.	Sold marketable securities costing $17,700 for cash, $14,750.
l.	Collected cash on accounts receivable, $72,300.

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	Acid-Test Ratio
x.	Paid a cash dividend previously declared	None	Increase	Increase
a	Issued capital stock for cash
b	sold inventory at a gain
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 receivable