3. Indicate the effects of the transaction listed below on each of the following total current assets, working capital (CA-CL), and current ratio. Indicate increase with “+," indicate decrease with “-" and indicate no effect cannot be determined with “0." Assume and initial current ration of greater than 1.0. Total Current Working Current Assets Capital Ratio 1. Food is sold for cash. 2. Equipment is sold less Than its book value. 3. A cash dividend is declared. 4. Treasury stock is purchased. 5. A fully depreciated fixed asset is retired. 6. Equipment is purchased with long-term notes. 7. Utility expenses are paid (they were not previously accrued). 8. A cash dividend is paid. |
3. Indicate the effects of the transaction listed below on each of the following total current assets, working capital (CA-CL), and current ratio. Indicate increase with “+," indicate decrease with “-" and indicate no effect cannot be determined with “0." Assume and initial current ration of greater than 1.0. Total Current Working Current Assets Capital Ratio 1. Food is sold for cash. 2. Equipment is sold less Than its book value. 3. A cash dividend is declared. 4. Treasury stock is purchased. 5. A fully depreciated fixed asset is retired. 6. Equipment is purchased with long-term notes. 7. Utility expenses are paid (they were not previously accrued). 8. A cash dividend is paid. |
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:3. Indicate the effects of the transaction listed below on each of the following total current assets, working capital
(CA-CL), and current ratio. Indicate increase with “+," indicate decrease with “–“ and indicate no effect
cannot be determined with “0." Assume and initial current ration of greater than 1.0.
Total
Current
Working
Current
Assets
Capital
Ratio
1. Food is sold for cash.
2. Equipment is sold less
Than its book value.
3. A cash dividend is declared.
4. Treasury stock is purchased.
5. A fully depreciated fixed asset
is retired.
6. Equipment is purchased with
long-term notes.
7. Utility expenses are paid (they
were not previously accrued).
8. A cash dividend is paid.
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