MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Chapter 13, Problem 3PSA
To determine
Introduction:
Liquidity or short-term ratios determines the ability of a firm to pay its current obligations. A good liquidity ration states that the company has liquid assets which can be easily convertible into cash. It includes
To prepare:
A table showing Plum’s Current ratio, acid-test ratio and
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Plum Corporation began the month of May with $700,000 of current assets, a
current ratio of 2.50:1, and an acid-test ratio of 1.10:1. During the month, it
completed the following transactions (the company uses a perpetual inventory
system). May 2 Purchased $50,000 of merchandise inventory on credit. May 8 Sold
merchandise inventory that cost $55,000 for $110,000 cash. May 10 Collected $20,000
cash on an account receivable. May 15 Paid $22,000 cash to settle an account
payable. May 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful
Accounts account. May 22 Declared a $1 per share cash dividend on its 50,000
shares of outstanding common stock. May 26 Paid the dividend declared on May
22. May 27 Borrowed $100,000 cash by giving the bank a 30-day, 10% note. May 28
Borrowed $80,000 cash by signing a long-term secured note. May 29 Used the $
180,000 cash proceeds from the notes to buy new machinery. Required: Complete
the table below showing Plum's (1) current ratio, (2)…
Plum Corporation began the month of May with $1,300,000 of current assets, a current ratio of 1.80:1, and an acid-test ratio of 1.40:1. During the month, it completed the following transactions (the company uses a perpetual inventory system).
May 2
Purchased $75,000 of merchandise inventory on credit.
May 8
Sold merchandise inventory that cost $45,000 for $150,000 cash.
May 10
Collected $23,000 cash on an account receivable.
May 15
Paid $31,500 cash to settle an account payable.
May 17
Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.
May 22
Declared a $1 per share cash dividend on its 58,000 shares of outstanding common stock.
May 26
Paid the dividend declared on May 22.
May 27
Borrowed $115,000 cash by giving the bank a 30-day, 10% note.
May 28
Borrowed $130,000 cash by signing a long-term secured note.
May 29
Used the $245,000 cash proceeds from the notes to buy new machinery.
Required:
Complete the table below showing Plum's…
Plum Corporation began the month of May with $1,400,000 of current assets, a current ratio of 2.00:1, and an acid-test ratio of 1.70:1.
During the month, it completed the following transactions (the company uses a perpetual inventory system).
May 2 Purchased $65,000 of merchandise inventory on credit.
May 8 Sold merchandise inventory that cost $55,000 for $140,000 cash.
May 10 Collected $26,000 cash on an account receivable.
May 15
Paid $29,500 cash to settle an account payable.
May 17
Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.
May 22 Declared a $1 per share cash dividend on its 62,000 shares of outstanding common stock.
May 26 Paid the dividend declared on May 22.
May 27 Borrowed $100,000 cash by giving the bank a 30-day, 10 % note.
May 28 Borrowed $120,000 cash by signing a long-term secured note.
May 29 Used the $220,000 cash proceeds from the notes to buy new machinery.
Required:
Complete the table below showing Plum's (1) current ratio, (2)…
Chapter 13 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
Ch. 13 - Prob. 1MCQCh. 13 - Prob. 2MCQCh. 13 - Prob. 3MCQCh. 13 - Prob. 4MCQCh. 13 - Prob. 5MCQCh. 13 - Prob. 1DQCh. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQ
Ch. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQCh. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Where on the income statement does a company...Ch. 13 - Prob. 14DQCh. 13 - Prob. 15DQCh. 13 - Prob. 16DQCh. 13 - Use Samsungs financial statements in Appendix A to...Ch. 13 - Prob. 1QSCh. 13 - Prob. 2QSCh. 13 - Prob. 3QSCh. 13 - Prob. 4QSCh. 13 - Prob. 5QSCh. 13 - Prob. 6QSCh. 13 - Prob. 7QSCh. 13 - Prob. 8QSCh. 13 - Prob. 9QSCh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Prob. 8ECh. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Prob. 11ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 1PSACh. 13 - Prob. 2PSACh. 13 - Prob. 3PSACh. 13 - Selected year-end and financial statement of...Ch. 13 - Prob. 5PSACh. 13 - Prob. 6PSACh. 13 - Prob. 1PSBCh. 13 - Prob. 2PSBCh. 13 - Kato Corporation began the month of June with...Ch. 13 - Prob. 4PSBCh. 13 - Prob. 5PSBCh. 13 - Prob. 6PSBCh. 13 - This serial Problem began in Chapter 1 and...Ch. 13 - Refer to Apples financial statements in appendix A...Ch. 13 - Prob. 2BTNCh. 13 - Prob. 3BTNCh. 13 - Prob. 4BTNCh. 13 - Prob. 5BTNCh. 13 - Prob. 6BTNCh. 13 - Prob. 7BTNCh. 13 - Prob. 8BTNCh. 13 - Prob. 9BTN
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