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Need some help, thank you so much! Problem 13-3A Transactions, working capital, and liquidity ratlos LO P3 Plum Corporation began the month of May with
Need some help, thank you so much!
Problem 13-3A Transactions, working capital, and liquidity ratlos LO P3 Plum Corporation began the month of May with $700.000 of current assets, a current ratio of 240:1, and an acid-test ratio of 1.30.1. During the month. It completed the following transactions (the company uses a perpetual Inventory system). May 2 Purchased $60,088 of merchandise inventory on credit. 8 Sold merchandise inventory that cost $50,880 for $130,eee cash. 10 collected $25,000 cash on an account receivable. 15 Paid $27,000 cash to settle an account payable. 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account. 22 Declared a $1 per share cash dividend on its 60,880 shares of outstanding common stock. 26 Paid the dividend declared on May 22 27 Borrowed $185,00 cash by giving the bank a 38-day, 18 note. 28 Borrowed $130,888 cash by signing a long-term secured note. 29 Used the $235,888 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 ratlos to 2 decimal places and the working capitals to nearest dollar amount. Subtracted amount should be indicated with a minus sign.) Transaction Current Assets Quick Assets Current Liabilities $ 700,000 $ 379,167 $ 291,687 Current Ratio Acid-Test Ratio Working Capital 2.40 1.30 $ 408,333 Beginning May 2 Balance 700,000 291,667 May 8 Balance May 10 Balance May 15 Balance May 17 Balance May 22 Balance May 28 Balance May 27 Balance May 28 Balance May 29 BalanceStep by Step Solution
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