Problem 17-3A (Algo) Transactions, working capital, and liquidity ratios LO P3 Plum Corporation began the month of May with $900,000 of current assets, a current ratio of 2.30:1, and an acid-test ratio of 1.30:1. During the month, it completed the following transactions (the company uses a perpetual inventory system). May 2 Purchased $75,000 of merchandise inventory on credit. May 8 Sold merchandise inventory that cost $50,000 for $125,000 cash. May 10 Collected $28,000 cash on an account receivable. May 15 Paid $24,500 cash to settle an account payable. May 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account. May 22 Declared a $1 per share cash dividend on its 65,000 shares of outstanding common stock. May 26 Paid the dividend declared on May 22. May 27 Borrowed $100,000 cash by giving the bank a 30-day, 10% note. May 28 Borrowed $125,000 cash by signing a long-term secured note. May 29 Used the $225,000 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. Amounts to be deducted should be indicated with a minus sign.) X Answer is not complete. Transaction Current Assets Quick Assets Current Liabilities Current Ratio Acid-Test Ratio Working Capital $ 508,696 Beginning $ 900,000 $ 508,696 $ 391,304 2.30 1.30 May 2 75,000 May 2 75,000 975,000 Balance after May 2 508,696 466,304 2.09 1.09 508,696 May 8 (50,000) May 8 125,000 125,000 Balance after May 8 1,050,000 633,696 466,304 2.25 1.35 583,696 May 8 125,000 125,000 Balance after May 8 1,050,000 633,696 466,304 2.25 1.35 583,696 May 10 28,000 28,000 May 10 (28,000) Balance after May 10 1,050,000 661,696 466,304 2.25 1.41 x 583,696 (24,500) (24,500) (24,500) May 15 May 15 Balance after May 15 1,025,500 637,196 441,804 2.32 1.44 X 583,696 May 17 May 17 Balance after May 17 1,025,500 637,196 441,804 2.32 1.44 X 583,696 65,000 1,025,500 637,196 506,804 1.75 1.26 518,696 (65,000) (65,000) May 22 May 22 Balance after May 22 May 26 May 26 Balance after May 26 May 27 May 27 960,500 572,196 506,804 2.17 1.12 x 518,696 100,000 100,000 100,000 672, 196 606,804 1.95 1.10 X 518,696 Balance after May 27 1,060,500 125,000 125,000 May 28 May 28 797,196 606,804 2.18 1.31 x 1,185,500 643,969 Balance after May 28 May 29 (225,000) (225,000) May 29 1.77 418,696 0.94 x $ 606,804 960,500 572,196 Balance after May 29