I.The balance sheet for Shaver Corporation reported the following: cash, $10,000; short-term investments, $15,000; net accounts receivable, $45,000; inventories, $50,000; prepaids, $15,000; equipment, $113,000; current liabilities, $50,000; notes payable (long-term), $80,000; total stockholders equity, $118,000; net income, $4,320; interest expense, $6,400; income before income taxes, $8,280.

1. Compute Shavers debt-to-assets ratio and times interest earned ratio. (Round your answers to 2 decimal places.)

II. BSO, Inc., has assets of $810,000 and liabilities of $607,500 resulting in a debt-to-assets ratio of 0.75. For each of the following transactions, determine whether the debt-to-assets ratio will increase, decrease, or remain the same, and enter the value of the new debt-to-assets ratio. Each item is independent. (Round your answers to 2 decimal places.)

Purchased new inventory on credit $62,000	--------	--------
Paid accounts Payable in the amount of $113,000
Record accrued salary in the amount of $205,000
Borrowed $355,000 from local bank