Financial statement data of Eastland Engineering include the following items: Requirements 1. Compute Eastlands current ratio, debt

Financial statement data of Eastland Engineering include the following items:

Requirements
1. Compute Eastland’s current ratio, debt ratio, and earnings per share.
2. Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately.
a. Borrowed $110,000 on a long-term note payable
b. Issued 20,000 shares of common stock, receiving cash of $368,000
c. Paid short-term notes payable, $30,000
d. Purchased merchandise of $48,000 on account, debiting Inventory
e. Received cash on account,$24,000

Transcribed Image Text:

Cash S30,000 Accounts payableS107,000 ties .n Inventories147,000 Other long-term liabilities... Prepaid expenses Total assets. Short-term notes payable.. 91,000 5,000 Net income 673,000 Number of common 48,000 shares outstanding.. 50,000