Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

whats the correct calculation for the boxes that I got incorrect? Effect of Transactions on Current Position Analysis Data pertaining to the current position of

image text in transcribed
image text in transcribed
whats the correct calculation for the boxes that I got incorrect?
Effect of Transactions on Current Position Analysis Data pertaining to the current position of Newlan Company are as follows: Cash $80,000 Temporary investments 160,000 Accounts and notes receivable (net) 235,000 Inventories 190,000 Prepaid expenses 10,000 Accounts payable 158,000 Notes payable (short-term) 80,000 Accrued expenses 12,000 Instructions: 1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round the current ratio and the quick ratio to one decimal place. Working capital 425,000 Current ratio 2.7 Quick ratio 1.9 2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions, and record the results in the appropriate columns. Consider nach transaction separately and assume that only that transaction affects the data given above. Format working capital as whole dollars. Round the current ratio and the quick ratio to one decimal place. Transaction Working Capital Current Ratio Quick Ratio 2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions, and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given above. Format working capital as whole dollars. Round the current ratio and the quick ratio to one decimal place. Transaction Working Capital Current Ratio Quick Ratio a. Sold temporary Investments for cash at no gain or loss, 550,000. 425,000 2.70 1.90 b. Pald accounts payable, $40,000. 425,000 3.02 X 2.07 X c. Purchased goods on account, $75,000 5,000,00 X 3.00 X 1.90 X d. Pald notes payable, $30,000 425,000 2.93 X 2.02 X e Declared a cash dividend, $15,000. 410,000 2.55 X 1.79 X 1. Declared a stock dividend on common stock, $24,000. 401,000 x 2.46 X 1.73 X 4. Borrowed cash from bank on a long-term note, $150,000 575,000 3.30 1.90 x h. Received cash on account, $72,000 425,000 1.90 Issued additional shares of stock for cash, $300,000 725,000 3.90 1.90 X 1. Paid cash for prepaid expenses, $10,000 425,000 2.70 1.86 x 2.70 F Check My W (a) Subtract current liabilities from current assets Set Up T accounts and calculate new balances and new working capital after each transaction (b) Divide current assets by current liabilities Set up T accounts and calculate new balances and new current ratio after each transaction (c) Divide quick assets by current anties Quick assets are cash, temporary Investments, and receivables. Set up accounts and calculate new balances and

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Audit Quality Developing A Quality Assurance And Improvement Program

Authors: Sally-Anne Pitt

1st Edition

1118715519, 978-1118715512

More Books

Students also viewed these Accounting questions

Question

Did BCE violate 5 of the FTC Act? If so, what is the proper remedy?

Answered: 1 week ago

Question

1. Always guess when only right answers are scored.

Answered: 1 week ago

Question

Does it have correct contact information?

Answered: 1 week ago