Effect of Transactions on Current Position AnalysisData pertaining to the current position of Lucroy Industries Inc. follow:Cash$440,000Marketable securities185,000Accounts and notes receivable (net)305,000Inventories750,000Prepaid expenses40,000Accounts payable210,000Notes payable (short-term)250,000Accrued expenses295,000Required:1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round ratios to one decimal place.a. Working capital$fill in the blank 1b. Current ratiofill in the blank 2c. Quick ratiofill in the blank 32. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.TransactionWorking CapitalCurrent RatioQuick Ratioa. Sold marketable securities at no gain or loss, $50,000.$fill in the blank 4 fill in the blank 5 fill in the blank 6b. Paid accounts payable, $145,000.$fill in the blank 7 fill in the blank 8 fill in the blank 9c. Purchased goods on account, $100,000.$fill in the blank 10 fill in the blank 11 fill in the blank 12d. Paid notes payable, $120,000.$fill in the blank 13 fill in the blank 14 fill in the blank 15e. Declared a cash dividend, $120,000.$fill in the blank 16 fill in the blank 17 fill in the blank 18f. Declared a common stock dividend on common stock, $50,000.$fill in the blank 19 fill in the blank 20 fill in the blank 21g. Borrowed cash from bank on a long-term note, $200,000.$fill in the blank 22 fill in the blank 23 fill in the blank 24h. Received cash on account, $120,000.$fill in the blank 25 fill in the blank 26 fill in the blank 27i. Issued additional shares of stock for cash, $570,000.$fill in the blank 28 fill in the blank 29 fill in the blank 30j. Paid cash for prepaid expenses, $12,000.$fill in the blank 31 fill in the blank 32 fill in the blank 33

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 4PB

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Effect of Transactions on Current Position Analysis

Data pertaining to the current position of Lucroy Industries Inc. follow:

Cash	$440,000
Marketable securities	185,000
Accounts and notes receivable (net)	305,000
Inventories	750,000
Prepaid expenses	40,000
Accounts payable	210,000
Notes payable (short-term)	250,000
Accrued expenses	295,000

Required:

1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round ratios to one decimal place.

a. Working capital	$fill in the blank 1
b. Current ratio	fill in the blank 2
c. Quick ratio	fill in the blank 3

2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.

Transaction	Working Capital	Current Ratio	Quick Ratio
a. Sold marketable securities at no gain or loss, $50,000.	$fill in the blank 4		fill in the blank 5	fill in the blank 6
b. Paid accounts payable, $145,000.	$fill in the blank 7		fill in the blank 8	fill in the blank 9
c. Purchased goods on account, $100,000.	$fill in the blank 10		fill in the blank 11	fill in the blank 12
d. Paid notes payable, $120,000.	$fill in the blank 13		fill in the blank 14	fill in the blank 15
e. Declared a cash dividend, $120,000.	$fill in the blank 16		fill in the blank 17	fill in the blank 18
f. Declared a common stock dividend on common stock, $50,000.	$fill in the blank 19		fill in the blank 20	fill in the blank 21
g. Borrowed cash from bank on a long-term note, $200,000.	$fill in the blank 22		fill in the blank 23	fill in the blank 24
h. Received cash on account, $120,000.	$fill in the blank 25		fill in the blank 26	fill in the blank 27
i. Issued additional shares of stock for cash, $570,000.	$fill in the blank 28		fill in the blank 29	fill in the blank 30
j. Paid cash for prepaid expenses, $12,000.	$fill in the blank 31		fill in the blank 32	fill in the blank 33

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