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
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Effect of Transactions on Current Position Analysis
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
a. Sold marketable securities at no gain or loss, $70,000.
Transcribed Image Text:Effect of Transactions on Current Position Analysis 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 a. 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 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
a. 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.
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Transcribed Image Text: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 a. 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
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