70.2K

Verified Solution

Link Copied!

ner 13 Favo Help 7 Plum Corporation began the month of May with $700,000 of current assets, a current ratio of 280:1, and an acid-test ratio of 130:1 During the month, it completed the following transactions the company uses a perpetual inventory system, May 2 Purchased $60,000 of merchandise inventory on credit. 8 Sold merchandise inventory that cost $50,000 for $160,000 cash. 10 Collected $27,000 cash on an account receivable. 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account. 22 Declared a $1 per share cash divided on its 62,000 shares of outstanding connon stock. 27 Borrowed $115,000 cash by giving the bank a 30-day, 104 note. 28 Borrowed $135,000 cash by signing a long-tern secured note. 29 Used the $250,000 cash proceeds from the notes to buy new machinery. Required: Complete the table showing Plum's (1) current ratio (2) acid-test ratio, and (3) working capital after each transaction (Do not round intermediate calculations. Round your ratios to 2 decimal places and the working capitals to nearest dollar amount. Subtracted amount should be indicated with a minus sign.) Book Print ferences Transaction Beginning May 2 Current Assets Quick Assets Current Liabilities Current Ratio Acid-Test Ratio Working Capital $ 700,000 $ 325.000 $ 250,000 280 1.305 450,000 of 60,000 780,000 60.000 310,000 Balance May 8 2.45 325,000 160,000 50,000 Balance May 10 Balance May 15 MacBook Pro $ # 3 % 5 & 7 C 9 2 4 6 8 o E W Q E R Y T U I L A S DF G HJ 50,000 160,000 Balance May 10 Balance May 15 Balance May 17 Balance May 22 Balance May 26 Balance May 27 Balance May 28 Balance May 29 Balance MacBook Pro A $ 4 & 2 C % 5 3 6 0. 7 8 9 0 W ER Y U 0

Answer & Explanation Solved by verified expert

See Answer