A company has current assets that total $594,000, has a current ratio of 2.20, and uses the perpetual inventory method. Assume that the following transactions are then completed: (1) sold $12,200 in merchandise on short-term credit for $15,400, (2) declared but did not pay dividends of $52,000, (3) paid prepaid rent in the amount of $10,800, (4) paid previously declared dividends in the amount of $52,000, (5) collected an account receivable in the amount of $12,200, and (6) reclassified $43,000 of long-term debt as a current liability. Required: Compute the updated current ratio after each transaction, by showing the cumulative effects of the transactions in the following table. (Round your answers to 2 decimal places.) Current Ratio Transaction (1) Transaction (2) Transaction (3) Transaction (4) Transaction (5) Transaction (6)

A company has current assets that total $594,000, has a current ratio of 2.20, and uses the perpetual inventory method. Assume that the following transactions are then completed: (1) sold $12,200 in merchandise on short-term credit for $15,400, (2) declared but did not pay dividends of $52,000, (3) paid prepaid rent in the amount of $10,800, (4) paid previously declared dividends in the amount of $52,000, (5) collected an account receivable in the amount of $12,200, and (6) reclassified $43,000 of long-term debt as a current liability. Required: Compute the updated current ratio after each transaction, by showing the cumulative effects of the transactions in the following table. (Round your answers to 2 decimal places.) Current Ratio Transaction (1) Transaction (2) Transaction (3) Transaction (4) Transaction (5) Transaction (6)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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