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Indicate the effect of each item on a Company's working capital, current ratio, and acid-test ratio

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Indicate the effect of each item on a Company's working capital, current ratio, and acid-test ratio. Use + for increase, ? for decrease, and (NE) for no effect.;1. Credit sales for the year amounted to $312,000. The cost of goods sold was $202,800.;2. Collected accounts receivable, $327,600.;3. Purchased inventory on account, $218,400.;4. Issued 650 shares of common stock for $23 per share.;5. Wrote off $9,100 of uncollectible accounts using the allowance for bad debts.;6. Declared and paid a cash dividend, $26,000.;7. Sold marketable securities costing $33,800 for $40,300 in cash.;8. Recorded insurance expense for the year, $15,600. The premium for the policy was paid in June 2013.;9. Borrowed cash on a short-term bank loan, $13,000.;10. Repaid principal of $52,000 and interest of $3,900 on a long-term bank loan

 

Paper#19252 | Written in 18-Jul-2015

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