Requirements:

1. Compute modern travelers current ration, debt ratio and earnings per share. Round all ratios to two decimal places.

2. Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately (round all ratios to two decimal places)

a. purchased inventory of $48,000 on account

b. Borrowed $126,000 on a long term note payable

c. issued 5,000 shares of common stock, receiving cash of 103,000

d. received cash on account $5,000