Selected balance sheet accounts for Tibbetts Company on September 30, 2019, are as follows: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Accounts payable Other accrued liabilities Short-term debt Total current liabilities $ 41,600 117,000 143,000 162,500 18,200 $482,300 $108,000 26,400 48,000 $182,400 s Required: a. Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2019. b. Summarized here are the transactions/events that took place during the fiscal year ended September 30, 2020. Prepare journal entries for the below transactions and Indicate the effect of each item on Tibbetts Company's working capital, current ratio, and acid-test ratio. Use + for increase, - for decrease, and (NE) for no effect. 1. Credit sales for the year amounted to $312,000. The cost of goods sold was $202,800. 2. Collected accounts receivable, $327,600. 3. Purchased inventory on account, $218,400. 4. Issued 650 shares of common stock for $23 per share. 5. Wrote off $9,100 of uncollectible accounts using the allowance for bad debts. 6. Declared and paid a cash dividend, $26,000. 7. Sold marketable securities costing $33,800 for $40,300 in cash. 8. Recorded insurance expense for the year, $15,600. The premium for the policy was paid in June 2019. 9. Borrowed cash on a short-term bank loan, $13,000 10. Repaid principal of $52,000 and interest of $3,900 on a long-term bank loan. Required A Required B1 Required B2 Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2019. (Round "Ratio" answers to 2 decimal places.) Working capital Current ratio Acid-test ratio Journal entry worksheet Credit sales for the year amounted to $312,000. Note: Enter debits before credits. Transaction General Journal Debit Credit 1(a) Record entry Clear entry View general journal Required A Required B1 Required B2 Indicate the effect of each item on Tibbetts Company's working capital, current ratio, and acid-test ratio. Use + for increase, - for decrease, and (NE) for no effect. Transaction/Event Working Capital NE Current Ratio Acid-Test Ratio + 0. Example: Paid accounts payable, $585,000. 1. Credit sales for the year amounted to $360,000. The cost of goods sold was $234,000 2. Collected accounts receivable, $378,000 3. Purchased inventory on account, $252,000. 4. Issued 250 shares of common stock for $54 per share. 5. Wrote off $10,500 of uncollectible accounts using the allowance for bad debts. 6. Declared and paid a cash dividend, $30,000 7. Sold marketable securities costing $39,000 for $46,500 in cash. 8. Recorded insurance expense for the year, $18,000. The premium for the policy was paid in June 2019. 9. Borrowed cash on a short-term bank loan, $15,000 10. Repaid principal of $60,000 and interest of $4,500 on a long-term bank loan.
