Plum Corporation began the month of May with $1,000,000 of current assets, a current ratio of 2.50:1, and an acid-test ratio of 1.40:1. During the month, it completed the following transactions (the company uses a perpetual inventory system). May 2 Purchased $60,000 of merchandise inventory on credit. 8 Sold merchandise inventory that cost $60,000 for $120,000 cash. 10 Collected $22,000 cash on an account receivable. 15 Paid $24,000 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 69,000 shares of outstanding common stock. 26 Paid the dividend declared on May 22. 27 Borrowed $100,000 cash by giving the bank a 30-day, 10% note. 28 Borrowed $125,000 cash by signing a long-term secured note. 29 Used the $225,000 cash proceeds from the notes to buy new machinery. Transaction Current Assets Quick Assets Current Liabilities Current Ratio Acid-Test Ratio Working Capital Beginning $ $ 560,000 $ 2.50 1.40 $ 600,000 1,000,000 60,000 400,000 60,000 May 2 Balance 460,000 May 8 1,060,000 120,000 (60,000) 120,000 Balance May 10 Balance May 15 (24,000) (24,000) (24,000) Balance May 17 (5,000) Balance May 22 May 22 Balance May 26 Balance May 27 Balance May 28 Balance May 29 Balance