Denna Company's working capital accounts at the beginning of the year follow: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Accounts payable Notes due within one year Accrued liabilities $ 50,000 $ 30,000 $ 200,000 $ 210,000 $ 10,000 $ 150,000 $ 30,000 $ 20,000 During the year, Denna Company completed the following transactions: X. Paid a cash dividend previously declared, $12,000. a. Issued additional shares of common stock for cash, $100,000. b. Sold inventory costing $50,000 for $80,000, on account. c. Wrote off uncollectible accounts in the amount of $10,000, reducing the accounts receivable balance accordingly. d. Declared a cash dividend, $15,000. e Paid accounts payable, $50,000 f. Borrowed cash on a short-term note with the bank, $35,000. Required: 1. Compute the following amounts and ratios as of the beginning of the year a. Working capital. b. Current ratio c. Acid-test ratio. 2. Indicate the effect of each of the transactions given above on working capital and the current 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. Complete this question by entering your answers in the tabs below. Required: Required 2 1. Compute the following amounts and ratios as of the beginning of the year. a. Working capital b. Current ratio c. Acid-test ratio 2. Indicate the effect of each of the transactions given above on working capital and the current 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Indicate the effect of each of the transactions given above on working capital and the current 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 The Effect on Working Capital Current Ratio None Increase x. Paid a cash dividend previously declared a. Issued additional shares of common stock for cash b. Sold inventory at a gain c. Wrote off uncollectible accounts d. Declared a cash dividend e. Pald accounts payable 1. Borrowed on a short-term note Required 1 Roured2 Required: 1. Compute the following amounts and ratios as of the beginning of the year a. Working capital. b. Current ratio. C. Acid-test ratio 2. Indicate the effect of each of the transactions given above on working capital and the current ratio. Give the effect in terms increase, decrease, or none. Item (x) is given as an example. Consider each transaction independently and indicate their effe compared to the ratios and amounts at the beginning of the period, Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 Required 2 >
