Selected amounts from Reingold Companys balance sheet from the beginning of the year follow:

Cash	$	73,000
Marketable Securities	$	13,500
Accounts receivable, net	$	357,200
Inventory	$	467,800
Prepaid expenses	$	10,100
Plant and equipment, net	$	980,000
Accounts payable	$	205,400
Accrued liabilities	$	62,700
Notes due within one year	$	106,000
Bonds payable in five years	$	143,000

During the year, the company completed the following transactions:

x.	Purchased inventory on account, $52,250.
a.	Declared a cash dividend, $33,000.
b.	Paid accounts payable, $104,800.
c.	Collected cash on accounts receivable, $83,300.
d.	Purchased equipment for cash, $77,400.
e.	Paid a cash dividend previously declared, $33,000.
f.	Borrowed cash on a short-term note with the bank, $64,500.
g.	Sold inventory costing $72,400 for $103,000, on account.
h.	Wrote off uncollectible accounts in the amount of $11,200 reducing the accounts receivable balance accordingly.
i.	Sold marketable securities costing $13,500 for cash, $10,200.
j.	Issued additional shares of common stock for cash, $206,000.
k.	Paid off all short-term notes due, $170,500.

Required:

1.	Compute the following amounts and ratios as of the beginning of the year:

.

2. Current ratio. (Round your answer to 2 decimal places.)

.

3. Acid-test ratio. (Round your answer to 2 decimal places.)

4. 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
	Transaction	Working Capital	Current Ratio	Acid-Test Ratio
(x)	Purchased inventory on account	None	Decrease	Decrease
(a)	Declared a cash dividend
(b)	Paid accounts payable
(c)	Collected cash on accounts receivable
(d)	Purchased equipment for cash
(e)	Paid a cash dividend previously declared
(f)	Borrowed cash on a short-term note with the bank	Increase	Decrease	Decrease
(g)	Sold inventory on account at more than its cost
(h)	Wrote off uncollectible accounts
(i)	Sold marketable securities at less than its cost
(j)	Issued additional shares of common stock for cash
(k)	Paid off short-term notes