Wild Inc. began the month of May with $200,000 of current assets, a 2 to 1 current ratio, and a 1 to 1 acid-test (quick) ratio. During the month, the following transactions were completed (assume a perpetual inventory system):

Required
1. State the effect of each of the above transactions on the current ratio and the acid-test ratio. Give the effect in terms of increase, decrease, or no change. Use check marks to indicate your answers.
2. For the end of May, calculate the
i. Current ratio
ii. Acid-test ratio
iii. Workingcapital

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Current Ratio Acid-Test Ratlo Increase Decrease No Change Increase Decrease No Change a. Bought $50,000 of Credit sales: $70,000 o merchandise costing $40,000 c. Collected an $8,500 account d. Paid a $30,000 account payable e. Wrote off a $2,000 bad debt against the allowance account Declared a $1 per share cash dividend on the 20,000 common g. Paid the dividend declared in ()... h. Borrowed $25,000 by giving the bank a 60-day, 10% note i. Borrowed $100,000 by placing a 10-year mortgage on the PPE assets. Used $50,000 of proceeds of the mortgage to buy additional machine