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Help please Problem 13-3A (Algo) Transactions, working capital, and liquidity ratios LO P3 Plum Corporation began the month of May with $1,500,000 of current assets,
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Problem 13-3A (Algo) Transactions, working capital, and liquidity ratios LO P3 Plum Corporation began the month of May with $1,500,000 of current assets, a current ratio of 2.30:1, and an acid-test ratio of 1.50:1. During the month, it completed the following transactions (the company uses a perpetual inventory system). May 2 Purchased $80,000 of merchandise inventory on credit. May 8 Sold nerchandise inventory that cost $45,000 for $140,000 cash. May 10 collected $27,000 cash on an account receivable. May 15 Paid $30,000 cash to settle an account payable. May 17 Wrote off a $5, 6ye bad debt against the Allowance for Doubtful Accounts account. May 22 Declared a $1 per share cash dividend on its 65,000 shares of outstanding conmon stock. May 26 Paid the dividend declared on May 22. May 27 Borrowed $100,000 cash by giving the bank a 30-day, 104 note. May 28 Borroned $110,000 cash by signing a tong-ters secured note. May 29 Used the $210,000 cash proceeds from the notes to buy new machinery. Required: Complete the table below showing Plum's (1) current ratio, (2) acid-test ratio, and (3) working capital after each transaction. (Do not round intermediate calculations. Round your ratios to 2 decimal places and the working capitals to nearest dollar amount. Amounts to be deducted should be indicated with a minus sign.) Step by Step Solution
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