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Plum Corporation began the month of May with $1,200,000 of current assets, a current ratio of 2 80:1, and an acid-test ratio of 1.40:1 During

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Plum Corporation began the month of May with $1,200,000 of current assets, a current ratio of 2 80:1, and an acid-test ratio of 1.40:1 During the month, it completed the following transactions (the company uses a perpetual inventory system). May 2 Purchased $70,000 of merchandise inventory on credit. 8 Sold merchandise inventory that cost $55,000 for $240,000 cash. 18 Collected $28,000 cash on an account receivable 15 Paid $23,500 cash to settle an account payable. 17 Wrote off a 35,000 bad debt against the Allowance for Doubtful Accounts account. 22 Declared a $1 per share cash dividend on its 66,000 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 $125,000 cash by signing a long-term secured note. 29 Used the $225,000 cash proceeds from the notes to buy new machinery 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 Amounts to be deducted should be indicated with a minus sign.) Transaction Current Ratio Acid-Test Ratio Working Capital Beginning May 2 Current Assets Quick Assets Current Liabilities S 1.200,000 $ 600.000 $ 428.571 70,000 70,000 280 1.40 $ 771.429 Transaction Current Assets QUICK Assets Current Liabilities Current Ratio ACID-Test Ratio Working Capital $ 1 200,000 $ Beginning May 2 600,000 $ 2.80 1.40 $ 771,429 70,000 428,571 70,000 Balance 1,270,000 498,571 May 8 140,000 0 140,000 (55,000) Balance May 10 Balance May 15 Balance May 17 Balance May 22 Balance May 17 Balance May 22 + Balance May 26 Balance May 27 Balance May 28 Balance May 29 Balance

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