Falcon Corporation has current assets of $400,000 and current liabilities of $275,000. Compute the effect of each of the following transactions on Falcon's current ratio: Refinanced a $60,000 long-term mortgage with a short-term note. Purchased $108,000 of merchandise inventory with short-term accounts payable. Paid $50,000 of short-term accounts payable. Collected $90,000 of short-term accounts receivable. please include details to support your response. Thank you.
Falcon Corporation has current assets of $400,000 and current liabilities of $275,000. Compute the effect of each of the following transactions on Falcon's current ratio: Refinanced a $60,000 long-term mortgage with a short-term note. Purchased $108,000 of merchandise inventory with short-term accounts payable. Paid $50,000 of short-term accounts payable. Collected $90,000 of short-term accounts receivable. please include details to support your response. Thank you.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 10RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...
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- Falcon Corporation has current assets of $400,000 and current liabilities of $275,000.
Compute the effect of each of the following transactions on Falcon's current ratio:
- Refinanced a $60,000 long-term mortgage with a short-term note.
- Purchased $108,000 of merchandise inventory with short-term accounts payable.
- Paid $50,000 of short-term accounts payable.
- Collected $90,000 of short-term accounts receivable. please include details to support your response. Thank you.
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Step 1: Current Ratio of Falcon Corporation
VIEWStep 2: Effect of refinancing a $60,000 long-term mortgage with a short-term note.
VIEWStep: 3 Purchased $108,000 of merchandise inventory with short-term accounts payable.
VIEWStep: 4 Paid $50,000 of short-term accounts payable.
VIEWStep: Collected $90,000 of short-term accounts receivable
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