The balance sheet of Mister Ribs Restaurant reports current assets of $60,000 and current liabilities of $30,000. Required: Calculate the current ratio of Mister Ribs Restaurant and determine whether it will increase or decrease as a result of the following transactions. Consider each item, (a) to (d), independent of the others. a. Paid $4,500 cash for a new oven. b. Received a $4,500 cash contribution from an investor for the company's common stock. c. Borrowed $18,600 cash from a bank, issuing a note that must be repaid in three years. d. Purchased $1,500 of napkins, paper cups, and other disposable supplies on account. Complete this question by entering your answers in the tabs below.
The balance sheet of Mister Ribs Restaurant reports current assets of $60,000 and current liabilities of $30,000. Required: Calculate the current ratio of Mister Ribs Restaurant and determine whether it will increase or decrease as a result of the following transactions. Consider each item, (a) to (d), independent of the others. a. Paid $4,500 cash for a new oven. b. Received a $4,500 cash contribution from an investor for the company's common stock. c. Borrowed $18,600 cash from a bank, issuing a note that must be repaid in three years. d. Purchased $1,500 of napkins, paper cups, and other disposable supplies on account. Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The balance sheet of Mister Ribs Restaurant reports current assets of $60,000 and current liabilities of $30,000.
Required:
Calculate the current ratio of Mister Ribs Restaurant and determine whether it will increase or decrease as a result of the following
transactions. Consider each item, (a) to (d), Independent of the others.
a. Paid $4,500 cash for a new oven.
b. Received a $4,500 cash contribution from an investor for the company's common stock.
c. Borrowed $18,600 cash from a bank, Issuing a note that must be repaid in three years.
d. Purchased $1,500 of napkins, paper cups, and other disposable supplies on account.
Complete this question by entering your answers in the tabs below.
Required A
Required B Required C
Numerator
Denominator
Calculate the current ratio and determine whether it will increase, decrease, or remain the same. Paid $4,500 cash for a new
oven.
Current Ratio
Required D
Current Assets
Current Liabilities
$ 70,500
37.500
Required A
1.88
Effect
Decrease
Required B >
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