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Indicate the immediate effects (Increase, Decrease, No Effect) of each of the following independent transactions on (1) the return on equity (ROE), (2) current ratio,
Indicate the immediate effects (Increase, Decrease, No Effect) of each of the following independent transactions on (1) the return on equity (ROE), (2) current ratio, and (3) the debt-equity ratio (total liabilities/equity funds). Assume the existing current ratio as 2:1 before adjusting for the following adjustments.
\begin{tabular}{|l|l|l|l|l|} \hline S.No. & Transactions & ReturnonEquity & CurrentRatio & TotalLiabilitiestoequity \\ \hline A & AfirmpurchasemerchandizeinventorycostingRs205,000oncredit. & & \\ \hline B & A firm sells for Rs 150,000 on account & & \\ \hline C & AfirmcollectsRs100,000fromcustomersonaccountsreceivables. & & & \\ \hline D & AfirmpaysRs160,000tosuppliersonaccountspayables & & & \\ \hline E & AfirmsellsforRs10,000amachinecostingRs40,000andwithtotalaccumulateddepreciationofRs30,000 & & & \\ \hline F & Afirmannouncedandpaidthedividendsfortheyear201819ofRs80,000. & & & \\ \hline G & A firm issues equity shares for Rs 75,000 & & & \\ \hline \end{tabular}Step by Step Solution
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