Effect of Transactions on Current Position Analysis Data pertaining to the current position of Lucroy Industries Inc. follows: Cash $800,000 Marketable securities 550,000 Accounts and notes receivable (net) 850,000 Inventories 700,000 Prepaid expenses 300,000 Accounts payable 1,200,000 Notes payable (short-term) 700,000 Accrued expenses 100,000 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 $ b. Current ratio c. Quick ratio
Effect of Transactions on Current Position Analysis Data pertaining to the current position of Lucroy Industries Inc. follows: Cash $800,000 Marketable securities 550,000 Accounts and notes receivable (net) 850,000 Inventories 700,000 Prepaid expenses 300,000 Accounts payable 1,200,000 Notes payable (short-term) 700,000 Accrued expenses 100,000 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 $ b. Current ratio c. Quick ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Practice Pack
Effect of Transactions on Current Position Analysis
Data pertaining to the current position of Lucroy Industries Inc. follows:
| Cash | $800,000 |
| Marketable securities | 550,000 |
| Accounts and notes receivable (net) | 850,000 |
| Inventories | 700,000 |
| Prepaid expenses | 300,000 |
| Accounts payable | 1,200,000 |
| Notes payable (short-term) | 700,000 |
| Accrued expenses | 100,000 |
Required:
1. Compute (a) the
| a. Working capital | $ |
| b. Current ratio | |
| c. Quick ratio |
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, $500,000. | $ | ||||||||
| b. Paid accounts payable, $287,500. | $ | ||||||||
| c. Purchased goods on account, $400,000. | $ | ||||||||
| d. Paid notes payable, $125,000. | $ | ||||||||
| e. Declared a cash dividend, $325,000. | $ | ||||||||
| f. Declared a common stock dividend on common stock, $150,000. | $ | ||||||||
| g. Borrowed cash from bank on a long-term note, $1,000,000. | $ | ||||||||
| h. Received cash on account, $75,000. | $ | ||||||||
| i. Issued additional shares of stock for cash, $2,000,000. | $ | ||||||||
| j. Paid cash for prepaid expenses, $200,000. | $ |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Includes step-by-step video
Trending now
This is a popular solution!
Learn your way
Includes step-by-step video
Step by step
Solved in 5 steps with 6 images
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education