Talley Incorporated had the following transactions involving current assets and current liabilities during February 2010.
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3 |
Collected accounts receivable of $15,000. |
|
|
7 |
Purchased equipment for $20,000 cash. |
|
|
11 |
Paid $3,000 for a 3 year insurance policy. |
|
|
14 |
Paid accounts payable of $12,000. |
|
|
18 |
Declared cash dividends, $6,000. |
Additional information:
As of February 1, 2010, current assets were $110,000 and current liabilities were 40,000.
Instructions
Compute the current ratio as of the beginning of the month and after each transaction.