easePROBLEM 17-15 Effects of Transactions on Various Financial Ratios [LO2, LO3. L0your choice. In all cases, assume that the current assets exceed current liabilities both before andthe effect in terms of increase, decrease, or no effect on the ratio involved, and give the reason forIndicate the effect that each transaction or event would have on the ratio listed opposite to it. StateIn the right-hand column below, certain financial ratios are listed. To the left of each ratio is a businesstransaction or event relating to the operating activities of Graham Company.Business Transaction or EventRatioDebt-to-equity ratioEarnings per shareAcid-test ratio1. Inventory was sold for cash at a profit.2. Land was purchased for cash.3. Inventory was sold on account at cost.4. Some accounts payable were paid off.5. A customer paid an overdue bill.6. A cash dividend was declared, but not yet paid.7. A previously declared cash dividend was paid.8. The company's common stock price increased.9. The company's common stock price increased and earningsper share remained unchanged.10. Property was sold for a profit.11. Obsolete inventory was written off as a loss.12. Bonds were sold with an interest rate less than the company'sWorking capitalAverage collection periodCurrent ratioCurrent ratioBook value per shareDividend yield ratioReturn on total assetsInventory turnover ratioReturn on commonstockholders' equityDividend payout ratioreturn on assets.13. The company's common stock price decreased and thedividend paid per share remained the same.14. The company's net income decreased, but long-term debtremained unchanged.15. An uncollectible account was written off against the Allowancefor Bad Debts.16. Inventory was purchased on credit.17. The company's common stock price increased and earnings ·per share remained unchanged.18. The company paid off some accounts payable.Times interest earnedCurrent ratioAcid-test ratioPrice-earnings ratioDebt-to-equity ratioRequired:after the event or transaction. Use the following format for your answers:Effect on RatioReason for Increase, Decrease, or No Effecr1.2.Etc.

NOTE : As per BARTLEBY guidelines, when multiple questions are given then first question is to be…

Jeft of each ratio is a busine Hồn or event relating to the operating activities of Graham Company. Ratio Business Transaction or Event 1. Inventory was sold for cash at a profit. 2. Land was purchased for cash. 3. Inventory was sold on account at cost. 4. Some accounts payable were paid off. Debt-to-equity ratio Earnings per share Acid-test ratio 5. A customer naid an

Jeft of each ratio is a busine Hồn or event relating to the operating activities of Graham Company. Ratio Business Transaction or Event 1. Inventory was sold for cash at a profit. 2. Land was purchased for cash. 3. Inventory was sold on account at cost. 4. Some accounts payable were paid off. Debt-to-equity ratio Earnings per share Acid-test ratio 5. A customer naid an

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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