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ebook Print Item Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are taken from the records of Redon Corp.: Cash $67,000 Short-term investments 60,000 Accounts receivable 75,000 Inventory 100,000 10,000 Prepaid insurance Accounts payable 75,000 Taxes payable 25,000 Salaries and wages payable 40,000 Short-term loans payable 210,000 Required: 1. Use the information provided to compute the amount of working capital and Redon's current and quick ratios (round to three decimal points). Use the minus sign to indicate a negative worlong capital. Working capital Current ratio to 1 Quick ratio to 1 2. Determine the effect that each of the following transactions will have on Redon's working capital, current ratio, and quick ratio by recalculating each and then indicating whether the measure is increased, decrease affected by the transaction. Consider each transaction independently; that is, assume that it is the only transaction that takes place. Use the minus sign to indicate a negative working capital for amounts in column one. For the ratios, round to three decimal places. If an amount is zero, enter"0" CFF affected by the transaction. Consider each transaction independently, that is, assume that it is the only transaction that takes place. Use the minus sign to indicate a negative working capital for amounts in column one. For the ratios, round to three decimal places. If an amount is zero, enter "0" Effect on Effect on Effect on Quick Ratic Working Capital Working Capital Current Ratio Current Ratio Quick Ratio Transaction to 1 none increase to 1 a. Purchased inventory on account, $20,000 none to 1 none to 1 b. Purchased inventory for cash, $10,000 $ decrease to 1 none to 1 c. Paid suppliers on account, $30,000 $ to 1 none to 1 none d. Received cash on account, $40,000 none to 1 none to 1 e. Paid insurance for next year, $20,000 increase to 1 to 1 increase $ f. Made sales on account, $43,000 decrease to 1 none to 1 g. Repaid short-term loans at bank, $25,000 to 1 increase none to 1 h. Borrowed $40,000 at bank for 90 days decrease to 1 decrease to 1 i. Declared and paid $45,000 cash dividend none to 1 to 1 none j. Purchased $20,000 of short-term investments decrease to 1 to 1 decrease $ k. Paid $30,000 in salaries decrease to 1 decrease V to 1 1. Accrued additional $15,000 in taxes Feedback Check My Work transaction that incrocas hath current secote and decrease in the ratin Tf the ratin ie lace than 10 tancation that incres TF the ratin ie arouter than 10 Previous Next (Application) eBook Print Item Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are taken from the records of Redon Corp.: Cash $67,000 Short-term investments 60,000 Accounts receivable 75,000 Inventory 100,000 Prepaid insurance 10,000 75,000 Accounts payable 25,000 Taxes payable Salaries and wages payable 40,000 Short-term loans payable 210,000 > Required: 1. Use the information provided to compute the amount of working capital and Redon's current and quick ratios (round to three decimal points). Use the minus sign to indicate a negative working capital. Working capital Current ratio to 1 Quick ratio to 1 2. Determine the effect that each of the following transactions will have on Redon's working capital, current ratio, and quick ratio by recalculating each and then indicating whether the measure is increased, decreased, or not affected by the transaction. Consider each transaction independently; that is, assume that it is the only transaction that takes place. Use the minus sign to indicate a negative working capital for amounts in column one. For the ratios, round to three decimal places. If an amount is zero, enter "0" Fffect on Effect on Effect of Transactions on Working Capital, Current Ratio, and Quick Ratio The following account balances are taken from the records of Redon Corp.: Cash $67,000 Short-term investments 60,000 Accounts receivable 75,000 Inventory 100,000 Prepaid insurance 10,000 Accounts payable 75,000 Taxes payable 25,000 Salaries and wages payable 40,000 Short-term loans payable 210,000 Required: 1. Use the information provided to compute the amount of working capital and Redon's current and quick ratios (round to three Working capital Current ratio to 1 Quick ratio to 1 2. Determine the effect that each of the following transactions will have on Redon's working capital, current ratio, and quick rati