Diego Company sells a wide range of goods through two retail stores operating in adjoining cities. Most purchases of goods for resale are on account. Occasionally, a short- term note payable is used to obtain cash for current use. The following transactions were selected from those occurring during 2015:
a. On January 10, 2015, purchased merchandise on credit, $ 36,000; the company uses a perpetual inventory system.
b. On March 1, 2015, borrowed $ 200,000 cash from the bank and signed an interest- bearing note payable at the end of one year, with an annual interest rate of 4 percent payable at maturity.
c. On April 5, 2015, sold merchandise on credit, $ 67,800; this amount included GST of $ 3,000 and PST of $ 4,800. The cost of sales represents 70 percent of the sales invoice.
Required:
1. Describe the financial statement effects of these transactions. Indicate the accounts affected and the amounts and direction of the effects (+ for increases and €“ for decreases) on the accounting equation. Use the following headings:

2. What amount of cash is paid on the maturity date of the note?
3. Discuss the impact of each transaction on Diego€™s cash flows.
4. Discuss the impact of each transaction on the quick ratio. Assume that the quick ratio is greater than 1.0 before considering each transaction.

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Date Assets Liabilities Shareholders' Equity