For each of the following transactions, show impact on financial position and indicate what effect the transaction will have on the indicated ratio (I = increase, D = decrease, NE = no effect). Assume the business uses perpetual inventory system. (20 pts)

Example:

Transcation Ratio

Repaid bond payable. Ratio of Liabilities to SE

Assets = Liabilities + stockholders equity

( A = L + SE)

- = - NE Effect = D

Transaction Ratio

a. Sold merchandise on account. Current Ratio

b. Sold merchandise on account. Inventory Turnover

c. Collected on accounts receivable. Quick Ratio

d. Wrote off an uncollectible account. Accounts Receivable Turnover

e. Paid on accounts payable. Current Ratio

f. Declared a cash dividend. Rate Earned on SE

g. Issued stock dividend. Ratio of Liabilities to SE

h. Accrued interest expense. Current ratio

i. Paid previously declared cash dividend. Dividends yield

j. Purchased treasury stock. Rate Earned on Total Assets