Problem 17-3A Analysis of working capital LO4 Halifax Fisheries Inc. began the month of March with $769,000 of current assets, a current ratio of 2.5 to 1, and a quick ratio of 11 to 1 During the month, It completed the following transactions: Mar. 6 Bought $86,900 of merchandise on account. (The company uses a perpetual inventory system.) 11 Sold merchandise that cost 71,800 for $122,500. 15 Collected a 30,900 account receivable. 17 Paid a $32,900 account payable. 19 Hrote off $14,900 bad debt against Allowance for Doubtful Accounts. 24 Declared a $2.20 per share cash dividend on the 41,900 outstanding common shares. 28 Paid the dividend declared on March 24. 29 Borrowed $94,500 by giving the bank a 30-day, 18% note. 30 Borrowed $119,000 by signing a long-term secured note. 31 Used the $213,500 proceeds of the notes to buy additional machinery. Required: Prepare a schedule showing Halifax Fisheries Inc.'s current ratio, quick ratio, and working capital after each of the transactions. (Round ratios to 2 decimal places and other final answers to nearest whole dollar.) Transaction Beginning Mar 6 Bal Mar 11 Bal Current Assets Quick Assets Current Liabilities Current Ratio 1 1 Quick Ratio 1 - C 1 Working Capital

Problem 17-3A Analysis of working capital LO4 Halifax Fisheries Inc. began the month of March with $769,000 of current assets, a current ratio of 2.5 to 1, and a quick ratio of 11 to 1 During the month, It completed the following transactions: Mar. 6 Bought $86,900 of merchandise on account. (The company uses a perpetual inventory system.) 11 Sold merchandise that cost 71,800 for $122,500. 15 Collected a 30,900 account receivable. 17 Paid a $32,900 account payable. 19 Hrote off $14,900 bad debt against Allowance for Doubtful Accounts. 24 Declared a $2.20 per share cash dividend on the 41,900 outstanding common shares. 28 Paid the dividend declared on March 24. 29 Borrowed $94,500 by giving the bank a 30-day, 18% note. 30 Borrowed $119,000 by signing a long-term secured note. 31 Used the $213,500 proceeds of the notes to buy additional machinery. Required: Prepare a schedule showing Halifax Fisheries Inc.'s current ratio, quick ratio, and working capital after each of the transactions. (Round ratios to 2 decimal places and other final answers to nearest whole dollar.) Transaction Beginning Mar 6 Bal Mar 11 Bal Current Assets Quick Assets Current Liabilities Current Ratio 1 1 Quick Ratio 1 - C 1 Working Capital

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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