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The balance sheet of Walgreens, a leading chain drugstore, as of August 31, 2009, appears as follows (dollars in millions): Assets Liabilities and owners Equity Cash                                        2,587 Accounts Payable                   4,308 Accounting Receivables          2,496 Othet short-term Payables    2,461 Inventory                                6,789 Long-term Payable                3,997 Other Noncurrent Assets      13,270 Shareholders' Equity            14,376 Total Assets                          25,142 Total Liabilities and            Shareholder's Equity           25,142                         REQUIRED: Assume that the following eight transactions occurred the next year (dollars in millions). Indicate the effect of each transaction on net income (revenues minus expenses), the current rati

The balance sheet of Walgreens, a leading chain drugstore, as of August 31, 2009, appears as follows (dollars in millions): Assets Liabilities and owners Equity Cash                                        2,587 Accounts Payable                   4,308 Accounting Receivables          2,496 Othet short-term Payables    2,461 Inventory                                6,789 Long-term Payable                3,997 Other Noncurrent Assets      13,270 Shareholders' Equity            14,376 Total Assets                          25,142 Total Liabilities and            Shareholder's Equity           25,142                         REQUIRED: Assume that the following eight transactions occurred the next year (dollars in millions). Indicate the effect of each transaction on net income (revenues minus expenses), the current rati

Financial Accounting
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter1: Introduction To Accounting And Business
Section: Chapter Questions
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The balance sheet of Walgreens, a leading chain drugstore, as of August 31, 2009, appears
as follows (dollars in millions):

Assets Liabilities and owners Equity
Cash                                        2,587 Accounts Payable                   4,308
Accounting Receivables          2,496 Othet short-term Payables    2,461
Inventory                                6,789 Long-term Payable                3,997
Other Noncurrent Assets      13,270 Shareholders' Equity            14,376
Total Assets                          25,142 Total Liabilities and            Shareholder's Equity           25,142                        

REQUIRED:
Assume that the following eight transactions occurred the next year (dollars in millions). Indicate the effect of each transaction on net income (revenues minus expenses), the current ratio
(current assets divided by current liabilities), working capital (current assets minus current
liabilities), and the debt/equity ratio (total liabilities divided by total shareholders’ equity) of
Walgreens. Use the following key: increase (), decrease (), no effect (NE). Treat each
transaction independently.

Transaction Net income Ccurrent ratio Working capital Dept/equity ratio
1.issued ownership shares for 100 cash        
2.Purchased equipment costing 95 for cash.        

3.Paid off a 200 long-term liability.

        
4.Sold inventory costing 500 for 685 cash.        
5.Declared a 512 dividend but have not paid.        
6.Paid 200 in wages payable.        
7.Received 75 from customers on account.        
8.Incurred and paid 30 in interest on short-term payables.        
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