individual transactions often have a significant impact on ratios this problem will 641745

Individual transactions often have a significant impact on ratios. This problem will consider the direction of such an impact.

	Total Current Assets	Total Current Liabilities	Net Working Capital	Current Ratio
a. Cash is acquired through issuance of additional common stock.	______	______	______	______
b. Merchandise is sold for cash. (Assume a profit.)	_________	_________	_________	_________
c. A fixed asset is sold for more than book value.	_________	_________	_________	_________
d. Payment is made to trade creditors for previous purchases.	_________	_________	_________	_________
e. A cash dividend is declared and paid.	_________	_________	_________	_________
f. A stock dividend is declared and paid.	_________	_________	_________	_________
g. Cash is obtained through long term bank loans.	_________	_________	_________	_________
h. A profitable firm increases its fixed assets depreciation allowance account.	_________	_________	_________	_________
i. Current operating expenses are paid.	_________	_________	_________	_________
j. Ten year notes are issued to pay off accounts payable.	_________	_________	_________	_________
k. Accounts receivable are collected.	_________	_________	_________	_________
l. Equipment is purchased with short term notes.	_________	_________	_________	_________
m. Merchandise is purchased on credit.	_________	_________	_________	_________
n. The estimated taxes payable are increased.	_________	_________	_________	_________
o. Marketable securities are sold below cost.	_________	_________	_________	_________

Required

Indicate the effects of the previous transactions on each of the following: total current assets, total current liabilities, net working capital, and current ratio. Use + to indicate an increase, to indicate a decrease, and 0 to indicate no effect. Assume an initial current ratio of more than 1 to 1.

individual transactions often have a significant impact on ratios this problem will 641745

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