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indicate the effect of each of these transactions on working capital, current ratio, and acid-test ratio of the company. Increase, Decrease, or No Effect. Consider

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indicate the effect of each of these transactions on working capital, current ratio, and acid-test ratio of the company. Increase, Decrease, or No Effect. Consider each transaction independently.

Working Capital

Current Ratio

Acid-Test Ratio

a.

Purchased new plant assets for cash, $20,000.

b.

Exchanged common stock for purchasing land. Estimated value of transaction, $80,000.

c.

Payment of $40,000 on short-term notes payable.

d.

Sold short-term marketable securities, that had a cost of $20,000, for $25,000 cash.

e.

Sold common stock for $70,000 in cash.

f.

Wrote off an account receivable in the amount of $2,000.

g.

Declared a cash dividend in the amount of $5,000, to be paid later.

$100,000 Cash Short-term Marketable $50,000 Securities $250,000 Accounts Receivables Less: Allowance for Doubtful (20,000) $230,000 $300,000 $8,000 $200,000 $50,000 $10,000 $30,000 Accounts Inventory (LIFO-based) Prepaid Expense Accounts Payable Short-term Notes Payable Taxes Payable Accrued Liabilities

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