Current assets for JC Inc. totalled $32,571, and the current ratio was 1.41. Assume that the following transactions were completed: (1) Purchased merchandise for $5,800 on short-term credit. (2) Purchased a delivery truck for $10,000-paid $2,890 cash and signed a two-year interest-bearing note for the balance. Required: 1. Determine without computations if the current ratio will increase, decrease, or remain unchanged after each transaction. Transaction (1) Transaction (2) Impact on Current Ratio 2. Compute the current ratio after each transaction. (Round the final answers to 2 decimal places.) Current Ratio
Current assets for JC Inc. totalled $32,571, and the current ratio was 1.41. Assume that the following transactions were completed: (1) Purchased merchandise for $5,800 on short-term credit. (2) Purchased a delivery truck for $10,000-paid $2,890 cash and signed a two-year interest-bearing note for the balance. Required: 1. Determine without computations if the current ratio will increase, decrease, or remain unchanged after each transaction. Transaction (1) Transaction (2) Impact on Current Ratio 2. Compute the current ratio after each transaction. (Round the final answers to 2 decimal places.) Current Ratio
Chapter3: Analyzing And Recording Transactions
Section: Chapter Questions
Problem 18EB: Krespy Corp. has a cash balance of $7,500 before the following transactions occur: A. received...
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