Homework Help is Here – Start Your Trial Now!
Business
Accounting
Provide anwers for the blanks in attached table. Indicate whether the following independent transactions increase (+), decrease (-), or do not affect (NE) the current ratio, the amount of working capital, and cash from operations. Also indicate the amounts of any effects.

Provide anwers for the blanks in attached table. Indicate whether the following independent transactions increase (+), decrease (-), or do not affect (NE) the current ratio, the amount of working capital, and cash from operations. Also indicate the amounts of any effects.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Provide anwers for the blanks in attached table. Indicate whether the following independent transactions increase (+), decrease (-), or do not affect (NE) the current ratio, the amount of working capital, and cash from operations. Also indicate the amounts of any effects. The company presently has a current ratio of 2 to 1 along with current liabilities of $160,000.

a. Paid accrued wages of $1,000. b. Purchased $20,000 worth of material on account. c. Received judgment notice from the court that the company must pay $70,000 damages for patent infringement within six months. d. Collected $8,000 of accounts receivable. e. Purchased land for factory for $100,000 cash. f. Repaid currently due bank note payable of $10,000. Received currently due note receivable of $15,000 from customer as consideration for sale of land. g. h. Received cash of $90,000 from stockholders as donated capital. i. Purchased machine costing $50,000; $15,000 down and the balance to be paid in seven equal annual installments. j. Retired bonds maturing five years hence at par of $50,000. Bonds have unamortized premium of $2,000. k. Declared dividends of $10,000 payable after year-end. 1. Paid the dividends in k in cash. m. Declared a 5% stock dividend. n. Paid the stock dividend in m. o. Signed a long-term purchase contract of $100,000 to commence a year from now. p. Borrowed $40,000 cash for one year. q. Paid accounts payable of $20,000. r. Purchase a patent for $20,000. s. Wrote off $15,000 of current marketable securities that became worthless. t. $8,500 of organization expenses were written off. u. Recorded depreciation expense of $70,000. v. Sold $28,000 of merchandise on account. w. Sold a building for $90,000 that had a book value of $45,000. x. Sold a machine at cost for $5,000; received $2,500 down and the balance receivable in six months. y. Recorded income tax expense of $80,000, half of which is deferred (long term). Current Ratio Effect Working Capital Effect $ Cash from Operations Effect $.
Transcribed Image Text:a. Paid accrued wages of $1,000. b. Purchased $20,000 worth of material on account. c. Received judgment notice from the court that the company must pay $70,000 damages for patent infringement within six months. d. Collected $8,000 of accounts receivable. e. Purchased land for factory for $100,000 cash. f. Repaid currently due bank note payable of $10,000. Received currently due note receivable of $15,000 from customer as consideration for sale of land. g. h. Received cash of $90,000 from stockholders as donated capital. i. Purchased machine costing $50,000; $15,000 down and the balance to be paid in seven equal annual installments. j. Retired bonds maturing five years hence at par of $50,000. Bonds have unamortized premium of $2,000. k. Declared dividends of $10,000 payable after year-end. 1. Paid the dividends in k in cash. m. Declared a 5% stock dividend. n. Paid the stock dividend in m. o. Signed a long-term purchase contract of $100,000 to commence a year from now. p. Borrowed $40,000 cash for one year. q. Paid accounts payable of $20,000. r. Purchase a patent for $20,000. s. Wrote off $15,000 of current marketable securities that became worthless. t. $8,500 of organization expenses were written off. u. Recorded depreciation expense of $70,000. v. Sold $28,000 of merchandise on account. w. Sold a building for $90,000 that had a book value of $45,000. x. Sold a machine at cost for $5,000; received $2,500 down and the balance receivable in six months. y. Recorded income tax expense of $80,000, half of which is deferred (long term). Current Ratio Effect Working Capital Effect $ Cash from Operations Effect $.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Basic Accounting Terms
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS