Effect of Transactions on Current Position AnalysisData pertaining to the current position of Forte Company follow:Cash$412,500Marketable securities187,500Accounts and notes receivable (net)300,000Inventories700,000Prepaid expenses50,000Accounts payable200,000Notes payable (short-term)250,000Accrued expenses300,000Required:1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round ratios to one decimal place.a. Working capital900,000b. Current ratio2.2C. Quick ratio1.22. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriatecolumns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.TransactionWorking CapitalCurrent RatioQuick Ratioa. Sold marketable securities at no gain or loss, $70,000. 2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriatecolumns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.TransactionWorking CapitalCurrent RatioQuick Ratioa. Sold marketable securities at no gain or loss, $70,000.b. Paid accounts payable, $125,000.C. Purchased goods on account, $110,000.d. Paid notes payable, $100,000.e. Declared a cash dividend, $150,000,f. Declared a common stock dividend on common stock, s50,000.g. Borrowed cash from bank on a long-term note, $225,000.h. Received cash on account, $125,000.i. Issued additional shares of stock for cash, $600,000.j. Paid cash for prepaid expenses, $10,000.Feedback%24%24%24%24

Current liabilities=Accounts payable+Note payable+Accrued…

Data pertaining to the current position of Forte Company follow: Cash $412,500 Marketable securities 187,500 Accounts and notes receivable (net) 300,000 Inventories 700,000 Prepaid expenses 50,000 Accounts payable 200,000 Notes payable (short-term) 250,000 Accrued expenses 300,000 Required: 1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio, Round ratios to one decimal place. a. Working capital 900,000 b. Current ratio 2.2 c. Quick ratio 1.2 2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place. Transaction Working Capital Current Ratio Quick Ratio Sold marketable securities at no gain or loss, $70,00.

Data pertaining to the current position of Forte Company follow: Cash $412,500 Marketable securities 187,500 Accounts and notes receivable (net) 300,000 Inventories 700,000 Prepaid expenses 50,000 Accounts payable 200,000 Notes payable (short-term) 250,000 Accrued expenses 300,000 Required: 1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio, Round ratios to one decimal place. a. Working capital 900,000 b. Current ratio 2.2 c. Quick ratio 1.2 2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place. Transaction Working Capital Current Ratio Quick Ratio Sold marketable securities at no gain or loss, $70,00.

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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Data pertaining to the current position of Forte Company follow:Cash $412,500Marketable securities 187,500Accounts and notes receivable (net) 300,000Inventories 700,000Prepaid expenses 50,000Accounts payable 200,000Notes payable (short-term) 250,000Accrued expenses 300,000 Instructions1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round ratios in parts b through j to one decimal place.2. List the following captions on a sheet of paper:Transaction Working Capital Current Ratio Quick Ratio Compute the working capital, the…
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