Problem 13-14A Effects of Transactions on Various Ratios [LO13-2] Denna Company's working capital accounts at the beginning of the year follow: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Accounts payable Notes due within one year Accrued liabilities $ 57,000 $ 29,500 $ 318,800 $ 426,200 $ 5,400 $ 176,600 $ 74,000 $ 48,300 During the year, Denna Company completed the following transactions: x. Paid a cash dividend previously declared, $17,000. a. Issued additional shares of common stock for cash, $174,000 b. Sold inventory costing $59,600 for $87,000, on account. c. Wrote off uncollectible accounts in the amount of $4,800, reducing the accounts receivable balance accordingly. d. Declared a cash dividend, $17,000. e. Paid accounts payable, $79,200. 1. Borrowed cash on a short-term note with the bank, $40,500. g. Sold inventory costing $21,090 for $14,060 cash. h. Purchased inventory on account, $40,250. i. Paid off all short-term notes due, $114,500. j. Purchased equipment for cash, $64,600. k. Sold marketable securities costing $19,500 for cash, $16,250. 1. Collected cash on accounts receivable, $65,700. Required: 1. Compute the following amounts and ratios as of the beginning of the year: (Round your ratios to 2 decimal places.) a. Working capital b. Current ratio c. Acid-test ratio 2. Indicate the effect of each of the transactions given above on working capital, the current ratio, and the acid-test ratio. Give the effect in terms of increase, decrease, or none. Item (x) is given as an example: Consider each transaction independently and indicate their effects as compared to the ratios and amounts at the beginning of the period. The Effect on Current Ratio Increase Acid-Test Ratio Increase Transaction Working Capital x. Paid a cash dividend previously declared None a. Issued capital stock for cash b. Sold inventory at a gain c. Wrote off uncollectible accounts d. Declared a cash dividend e. Paid accounts payable f. Borrowed on a short-term note g. Sold inventory at a loss h. Purchased inventory on account 1. Paid short-term notes due j. Purchased equipment for cash k. Sold marketable securities at a loss 1. Collected accounts receivable