Exercise 13-8 (Static) Analyzing effect of transactions on current ratio LO P3 On January 1,...
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Exercise 13-8 (Static) Analyzing effect of transactions on current ratio LO P3
On January 1, 5G Co. reported current assets of $72,000 and current liabilities of $60,000. Compute total current assets, total current liabilities, and the current ratio at January 1 and after each of the following transactions. (Round current ratio to two decimal places. Amounts to be deducted should be indicated with a minus sign.)
| Jan. | 5 | Purchased equipment to be used in operations for $18,000 cash. | ||
| Jan. | 12 | Paid $5,000 cash for accounts payable. | ||
| Jan. | 18 | Acquired a building in exchange for a $99,000 long-term note payable, first payment to occur in 3 years. | ||
| Jan. | 22 | Purchased $12,000 of merchandise on credit, terms n/45. | ||
| Jan. | 31 | Sold outdated machinery for $12,700 cash. |
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