1.	ComputeNorthtown's current? ratio, debt? ratio, and earnings per share.Round all ratios to two decimal places.
2.	Computethe three ratios after evaluating the effect of each transactionthat follows. Consider each transactionseparately.
	a.	Borrowed $105,000 on a? long-term note payable.
	b.	On January? 1, Issued $30,000 shares of common? stock, receiving cash of $367,000.
	c.	Paid? short-term notes? payable $24,000.
	d.	Purchased merchandise of $45,000 on? account, debiting Inventory.
	e.	Received cash on? account $23,000.

Cash………………………………………. $ 21,000      Accounts Payable……………. $100,000

Short-term investments………………….    33,000 Accruedliabilities……………….. 31,000

Accounts receivable, net………………..    86,000Long-term notes payable……… 166,000

Inventories………………………………. 144,000 Other long-term liabilities……..31,000

Prepaid expenses………………………      3,000 Net income…………………..    94,000

Total assets……………………………..    672,000 Number ofcommon

Short-term notes payable……………..     45,000 shares outstanding………….48,000

Requirement 1. Compute

Northtown'sNorthtown's

current? ratio, debt? ratio, and earnings per share. Round allratios to two decimal places.

Start by determining the formula for each? ratio, beginning withthe current? ratio, followed by the debt? ratio, and then earningsper share.

/

=

Current ratio

/

=

Debt ratio

(

-

) /

=

Earnings per share

Now compute

Northtown'sNorthtown's

current? ratio, debt? ratio, and earnings per share. ?(Round allratios to two decimal? places.)

	Current ratio	Debt ratio	Earnings per share

Requirement 2. Compute the three ratios afterevaluating the effect of each transaction that follows. Considereach transaction

separately.

?(Round all ratios to two decimal? places.)

	Current ratio	Debt ratio	Earnings per share
a.

b.

c.

d.

e.