Can you help solve this & explain the answers. Thank you Plum Corporation began the month of May with $900,000 of current assets, a current ratio of 2 201, and an acid-test ratio of 1.30.1 During the month, it completed the following transactions (the company uses a perpetual inventory system) Hay 2 Purchased $75,000 of aerchandise inventory on credit. May 8 Sold merchandise Inventory that cost $45,000 for $125,000 cash. May 10 Collected $22,00o cash on an account receivable. May 15 Paid $27,500 cash to settle an account payable. May 17 Wrote off a $5,0ee bad debt against the Alowance for Doubtful Accounts account. May 22 Declared a $1 per share cash dividend on its 68,000 shares of outstanding common stock. Hay 26 Paid the dividend declared on May 22. May 27 Borrowed $85,000 cash by giving the bank a 30-day, 10% note. May 28 Borrowed $105,000 cash by signing a long-tere secured note. May 29 Used the $190,000 cash proceeds from the notes to buy new machinery. Required: Complete the table below 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 doller amount. Amounts to be deducted should be indicated with a minus sign.) Transaction Current Assets Quick Assets Current Liabilities Current Ratio Acid Test Ratio Working Capital Beginning May 2 May 2 900,000 $ 531,818 $ 409.091 220 1.30 S 490 909 Balance after May 2 900,000 409 091 May 8 May 8 Balance after May 8 May 10 May 10 Balance after May 10 May 15 May 15 Balance after May 15 May 17 May 17 Balance after May 17 May 22 May 22 Balance after May 22 May 26 May 26 Balance after May 26 Balance after May 26 May 27 May 27 Balance after May 27 May 28 May 28 Balance after May 28 May 29 May 29 Balance after May 29
Can you help solve this & explain the answers. Thank you Plum Corporation began the month of May with $900,000 of current assets, a current ratio of 2 201, and an acid-test ratio of 1.30.1 During the month, it completed the following transactions (the company uses a perpetual inventory system) Hay 2 Purchased $75,000 of aerchandise inventory on credit. May 8 Sold merchandise Inventory that cost $45,000 for $125,000 cash. May 10 Collected $22,00o cash on an account receivable. May 15 Paid $27,500 cash to settle an account payable. May 17 Wrote off a $5,0ee bad debt against the Alowance for Doubtful Accounts account. May 22 Declared a $1 per share cash dividend on its 68,000 shares of outstanding common stock. Hay 26 Paid the dividend declared on May 22. May 27 Borrowed $85,000 cash by giving the bank a 30-day, 10% note. May 28 Borrowed $105,000 cash by signing a long-tere secured note. May 29 Used the $190,000 cash proceeds from the notes to buy new machinery. Required: Complete the table below 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 doller amount. Amounts to be deducted should be indicated with a minus sign.) Transaction Current Assets Quick Assets Current Liabilities Current Ratio Acid Test Ratio Working Capital Beginning May 2 May 2 900,000 $ 531,818 $ 409.091 220 1.30 S 490 909 Balance after May 2 900,000 409 091 May 8 May 8 Balance after May 8 May 10 May 10 Balance after May 10 May 15 May 15 Balance after May 15 May 17 May 17 Balance after May 17 May 22 May 22 Balance after May 22 May 26 May 26 Balance after May 26 Balance after May 26 May 27 May 27 Balance after May 27 May 28 May 28 Balance after May 28 May 29 May 29 Balance after May 29
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 37E: Analyzing the Accounts Casey Company uses a perpetual inventory system and engaged in the following...
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Transcribed Image Text:Can you help solve this & explain the answers. Thank you
Plum Corporation began the month of May with $900,000 of current assets, a current ratio of 2201, and an acid-test ratio of 1.30.1.
During the month, it completed the following transactions (the company uses a perpetual inventory system).
Hay 2 Purchased $75,000 of merchandise inventory on credit.
May 8 Sold merchandise inventory that cost $45,0e0 for $125,000 cash.
May 10 Collected $22,000 cash on an account receivable.
May 15 Paid $27,500 cash to settle an account payable.
May 17 Wrote off a $5,0e0 bad debt against the Alilowance for Doubtful Accounts account.
May 22 Declared a $1 per share cash dividend on its 68,000 shares of outstanding common stock.
May 26 Paid the dividend declared on May 22.
May 27 Borrowed $85,000 cash by giving the bank a 30-day, 10% note.
May 28 Borrowed $105,e00 cash by signing a long-tere secured note.
May 29 Used the $190,000 cash proceeds from the notes to buy new machinery.
Required:
Complete the table below 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.
Amounts to be deducted should be indicated with a minus sign.)
Transaction
Current Assets
Quick Assets Current Liabilities
Current Ratio Acid Test Ratio Working Capital
Beginning
May 2
May 2
Balance after May 2
900,000 $
531,818 5
409.091
2 20
1.30 $
490,909
900,000
409,091
May 8
May 8
Balance after May 8
May 10
May 10
Balance after May 10
May 15
May 15
Balance after May 15
May 17
May 17
Balance ater May 17
May 22
May 22
Balance after May 22
May 26
May 26
Balance after May 26
Balance after May 26
May 27
May 27
Balance after May 27
May 28
May 28
Balance after May 28
May 29
May 29
Balance after May 29
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