Plum Corporation began the month of May with $1,300,000 of current assets, a current ratio of 1.90:1, and an acid-test ratio of 1.20:1. During the month, it completed the following transactions (the company uses a perpetual inventory system).

Plum Corporation began the month of May with $1,300,000 of current assets, a current ratio of 1.90:1, and an acid-test ratio of 1.20:1. During the month, it completed the following transactions (the company uses a perpetual inventory system).

May2Purchased $60,000 of merchandise inventory on credit.8Sold merchandise inventory that cost $60,000 for $135,000 cash.10Collected $24,000 cash on an account receivable.15Paid $31,500 cash to settle an account payable.17Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.22Declared a $1 per share cash dividend on its 60,000 shares of outstanding common stock.26Paid the dividend declared on May 22.27Borrowed $120,000 cash by giving the bank a 30-day, 10% note.28Borrowed $130,000 cash by signing a long-term secured note.29Used the $250,000 cash proceeds from the notes to buy new machinery.