Cozy Corporation, a clothing retailer, engaged in the transactions listed in the first column of the table that follows. Opposite each transaction is a ratio and space to mark the effect of each transaction on the ratio.

REQUIRED

Show that you understand the effect of business activities on performance measures by placing an X in the appropriate column to show whether the transaction increased, decreased, or had no effect on the indicated ratio.

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Effect Transaction a Issued common stock for cash. b. Declared cash dividend. c Sold treasury stock. d. Borrowed cash by issuing note payable. e. Paid salaries expense. Ratio Asset turmover Current ratio Return on equity Debt to equity ratio Inventory tumover Current ratio Receivable turnover Quick ratlo Increase Decrease None f Purchased merchandise for cash g. Sold equipment for cash. h. Sold merchandise on account. I. Paid current portion of long-term deb. Return on assets Gave sales discount. Profit margin k. Purchased marketable securities for cash Quick ratio I. Declared 5% stock dividend. m. Purchased a building. Current ratio Free cash flow