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Plum Corporation began the month of May with $1100,000 of current assets, a current ratio of 2701, and an acid-test ratio of 160:1 During the
Plum Corporation began the month of May with $1100,000 of current assets, a current ratio of 2701, and an acid-test ratio of 160:1 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. 5 Sold merchandise Inventory that cost $60,000 for $135,000 cash 10 Collected $23,eco cash on an account receivable. 15 Paid $27,500 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 60,000 shares of outstanding common stock 26 Paid the dividend declared on May 22. 27 Borrowed $115,000 cash by giving the bank a 30 day, 10% note. 28 Borrowed $140,000 cash by signing a long-term secured note. 29 Used the $255,000 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 ratios to 2 decimal places and the working capitals to nearest dollar amount Subtracted amount should be indicated with a minus sign.) 6 Transaction Current Assets Quick Assets Current Liability Current Ratio Acid Test Ratio Working Capital 5 1,100,000 $ 651,052s Beginning May 2 407 407 2.70 160 $ 692,693 42 Dois Balance May 0 cook Balance May 10 Print Balance References May 15 Balance May 17 Balance May 22 Balance May 26 Balance May 27 Balance May 28 Balance May 29 Balance
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