Denna Companyâ??s working capital accounts at the beginning of the year follow: Cash$81,000 Marketab
Denna Companyâ€™s working capital accounts at the beginning of the year follow: Cash$81,000 Marketable securities$24,400 Accounts receivable, net$376,400 Inventory$488,600 Prepaid expenses$15,700 Accounts payable$219,800 Notes due within one year$122,000 Accrued liabilities$69,900 During the year, Denna Company completed the following transactions: x.Paid a cash dividend previously declared, $41,000.a.Issued additional shares of common stock for cash, $222,000.b.Sold inventory costing $78,800 for $111,000, on account.c.Wrote off uncollectible accounts in the amount of $14,400, reducing the accounts receivable balance accordingly.d.Declared a cash dividend, $41,000.e.Paid accounts payable, $117,600.f.Borrowed cash on a short-term note with the bank, $76,500.g.Sold inventory costing $17,520 for $11,680 cash.h.Purchased inventory on account, $58,250.i.Paid off all short-term notes due, $198,500.j.Purchased equipment for cash, $83,800.k.Sold marketable securities costing $14,400 for cash, $12,000.l.Collected cash on accounts receivable, $92,100. Required:1.Compute the following amounts and ratios as of the beginning of the year: (Round your ratios to 2 decimal places.) 2.Indicate the effect of each of the transactions given above on working capital, the current ratio, and the acid-test ratio. Give the effect in terms of increase, decrease, or none. Item (x) is given as an example: Consider each transaction independently and indicate their effects as compared to the ratios and amounts at the beginning of the period.
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