Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are taken from the records of Qun Enterprises Cash $69,000 Short-term investments 60,000 Accounts receivable 22,000 Inventory 100,000 Prepaid insurance 10,000 Accounts payable 75,000 Taxes payable 25,000 Salaries and wages payable 40,000 Short-term loans payable 210,000 Required: 1. Use the information provided to compute the amount of working capital and Que's current and quick ratios (round to three decimal points Use the minus sign to indicate a negative working capital Working capital Current ratio to 1 Quick ratio 2. Determine the effect that each of the following transactions will have an Qua's working capital, current ratio, and quick ratio by recalculating each and then indicating whether the measure is increased decreased, or not affected by the transaction. Consider each transaction independently, that is, assume that it's the only transaction that takes place to! Use the minus sign to indicate a negative working capital for amount is column one. For the ratios, round to three decimal places. If an amount is zero, anter Effect on ER Warwinnitat Use the minus sign to indicate a negative working capital for amounts in column one. For the ratios, round to three decimal places. If an amount is zero, entero" Effect on En Working Capital Transaction Working Capital Current Ratio Curre 2. Purchased Inventory on account, $20,000 none to 1 Incre b. Purchased inventory for cash, $14,000 none to 1 non c. Pald suppliers on account, $30,000 none to 1 decre d. Received cash on account, $40,000 none to 1 non e. Pald Insurance for next year, $20,000 none to 1 non 1. Made sales on account, $54,000 Increase to 1 9. Repaid short-term loans at bank, $25,000 to 1 decre h. Borrowed $40,000 at bank for 90 days none incre 1. Declared and paid $45,000 cash dividend decrease to 1 decre 1. Purchased $20,000 of short-term investments none to 1 non W. Paid $30,000 in salaries decrease to 1 decre 1. Accrued additional $15,000 in taxes decrease to 1 decre incred none to Ched co wcat, current ratio, and quick rate by recitating each and then indicatino actan Cibraon independently, Dats, assume that it is the only transaction cum one for the round to be places of an amount is zero, era o Effect on Working Capital Working Capital Current Ratio no to 1 Effect on Current Ratio Quick Ratio Effect on Quick Ratio decrease increase 101 hone to! 0.1 decrease hone decrease to 1 decrease tot none mone 101 no to 1 decrease Increase to 1 to1 increase Increase decrease mo decrease none to 1 Increase lace decrease 1 decrease to none to 1 none dece DI decres to decrease decre 101 decrease t51 mwy Want Previous Next M Send En Submit Auf Grading 7 8 C 9 o de T I O P G I K L B N M V. command option Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are taken from the records of Qua Enterprises: $69,000 Cash Short-term investments Accounts receivable 60,000 72,000 Inventory Prepaid insurance Accounts payable Taxes payable Salaries and wages payable Short-term loans payable 100,000 10,000 75,000 25,000 40,000 210,000 Required: 1. Use the information provided to compute the amount of working capital and Qua's current and quick ratlos (round to three decimal points). Use the minus indicate a negative working capital Working capital Current ratio to 1 to 1 Quick ratio 2. Determine the effect that each of the following transactions will have on Qua's working capital, current ratio, and quick ratio by recalculating each and then whether the measure is increased, decreased, or not affected by the transaction. Consider each transaction independently; that is, assume that it is the only tra that takes place. Use the minus sign to indicate a negative working capital for amounts in column one. For the ratios, round to three decimal places. If an amount is zero, enter Effect on Check My Work Previous Current ratio to 1 Quick ratio to 1 none 2. Determine the effect that each of the following transactions will have on Qua's working capital, current ratio, and quick ratio by recalculating each and then in whether the measure is increased, decreased, or not affected by the transaction. Consider each transaction independently; that is, assume that it is the only tran that takes place Use the minus sign to Indicate a negative working capital for amounts in column one. For the ratios, round to three decimal places. If an amount is zero, enter Effect on Transaction Working Capital Working Capital Current Ratio a. Purchased Inventory on account, $20,000 none to 1 b. Purchased inventory for cash, $14,000 none to 1 C. Pald suppliers on account, $30,000 to 1 d. Received cash on account, $40,000 none to 1 e. Paid insurance for next year, $20,000 to 1 f. Made sales on account, $54,000 Increase to 1 9. Repaid short-term loans at bank, $25,000 none to 1 h. Borrowed $40,000 at bank for 90 days none to 1 1. Declared and paid $45,000 cash dividend decrease to 1 3. Purchased $20,000 of short-term investments to 1 k. Paid $30,000 in salaries decrease to 1 1. Accrued additional $15,000 in taxes decrease to 1 none OI none working capital, current ratio, and quick ratio by recalculating each and then indicating nsider each transaction independently, that is, assume that it is the only transaction For the ratios, round to three decimal places. If an amount is zero, enter "0" Effect on king Capital Working Capital Current Ratio Effect on Current Ratio Quick Ratio Effect on Quick Ratio decrease none to 1 increase to 1 none to 1 none to 1 decrease decrease none to 1 decrease to 1 none to 1 none to 1 none none to 1 none to 1 decrease increase to 1 Increase to 1 increase none to 1 decrease to 1 decrease none to 1 Increase to 1 Increase decrease to 1 decrease to 1 decrease none to 1 none to 1 none decrease to 1 decrease to 1 decrease decrease to 1 decrease to 1 decrease Previous Next >
