Selected balance sheet accounts for Tibbetts Company on September 30, 2016, are as follows:
b-1. Prepare journal entries for the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Selected balance sheet accounts for Tibbetts Company on September 30, 2016, are as follows: S 38,400 108,000 132.000 150,000 16,800 Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses $445,200 Total current assets $ 81,000 19,800 36,000 Accounts payable Other accrued liabilities Short-term debt $136,800 Total current liabilities Required: a. Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2016. (Round "Ratio" answers to 2 decimal places.) Working capital Current ratio Acid-test ratio b. Summarized here are the transactions/events that took place during the fiscal year ended September 30, 2017 1. Credit sales for the year amounted to $288,000. The cost of goods sold was $187,200. 2. Collected accounts receivable, $302,400. 3. Purchased inventory on account, $201,600. 4. Issued 600 shares of common stock for $22 per share. 5. Wrote off $8,400 of uncollectible accounts using the allowance for bad debts. 6. Declared and paid a cash dividend, $24,000. 7. Sold marketable securities costing $31,200 for $37,200 in cash. 8. Recorded insurance expense for the year, $14,400. The premium for the policy was paid in June 2016. 9. Borrowed cash on a short-term bank loan, $12,000. 10. Repaid principal of $48,000 and interest of $3,600 on a long-term bank loan. Credit sales for the year amounted to $288,000. 1 The cost of goods sold was $187,200. 2 Collected accounts receivable, $302,400 3 Purchased inventory on account, $201,600. 4 Issued 600 shares of common stock for $22 per share. 5 Wrote off $8,400 of uncollectible accounts using the allowance for bad debts Declared and paid a cash dividend, $24,000 7 journal entry has been entered Note = Sold marketable securities costing $31,200 for $37,200 in cash Recorded insurance expense for the year, $14,400. The premium for the policy was paid in June 2016 Borrowed cash on a short-term bank loan, $12,000. 10 11 Repaid principal of $48,000 and interest of $3,600 on a long-term bank loan Note: journal entry has been entered b-2. 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. Acid- Working Capital Current Transaction/Event Test Ratio Ratio Example: Paid accounts payable, $76,000. NE 1. Credit sales for the year amounted to $288,000. The cost of goods sold was $187,200. 2. Collected accounts receivable, $302,400. 3. Purchased inventory on account, $201,600. 4. Issued 600 shares of common stock for $22 per share. 5. Wrote off $8,400 of uncollectible accounts using the allowance for bad debts. 6. Declared and paid a cash dividend, $24,000. 7. Sold marketable securities costing $31,200 for $37,200 in cash. 8. Recorded insurance expense for the year, $14,400. The premium for the policy was paid in June 2016. 9. Borrowed cash on a short-term bank loan, $12,000. 10. Repaid principal of $48,000 and interest of $3,600 on a long-term bank loan
