Problem 13-3A Transactions, working capital, and liquidity ratios LO P3 Plum Corporation began the month of May with $1,400,000 of current assets, a current ratio of 2.50:1, and an acid-test ratio of 1.60:1. During the month, it completed the following transactions (the company uses a perpetual inventory system). May 2 Purchased $55,000 of merchandise inventory on credit. 8 Sold merchandise inventory that cost $55,000 for $145,000 cash. 10 Collected $27,000 cash on an account receivable. 15 Paid $26,000 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 64,000 shares of outstanding common stock. 26 Paid the dividend declared on May 22. 27 Borrowed $105,000 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 $230,000 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.) Transaction Current Assets Quick Assets Current Liabilities Current Ratio Acid-Test Ratio Working Capital $ 1,400,000 $ 896,000 $ 560,000 2.50 1.60 $ 840,000 Beginning May 2 Balance 1,400,000 560,000 May 8 Balance May 10 Balance Balance May 10 Balance May 15 Balance May 17 Balance May 22 Balance May 26 Balance May 27 Balance May 28 Balance May 29 Balance