Problem 17-3A Transactions, working capital, and liquidity ratios LO P3 Plum Corporation began the month of May with $1,500,000 of current assets, a current ratio of 2.00:1, and an acid-test ratio of 1.60:1. During the month, it completed the following transactions (the company uses perpetual inventory system). 2 Purchased $80,000 of merchandise inventory on credit 8 Sold merchandise inventory that cost $50,000 for $125,000 cash 10 Collected $23,000 cash on an account receivable. 15 Paid $31,500 cash 17 Wrote off a $5,000 bad debt aqainst 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 $100,000 cash by giving the bank a 30-day, 10% note. 28 Borrowed $110,000 cash by signing a long-term secured note. 29 Used the $210,000 cash proceeds from the notes to buy new machinery May to settle an account payable. 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.) Current Assets Quick Assets Acid-Test Ratio Working Capital Transaction Current Liabilities Current Ratio Beginning 1,500,000 $1,200,000 750,000 2.00 1.60 750,000 May 2 Balance 1,500,000 750,000 May 8 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