Individual transactions often have a significant impact on ratios. This problem will consider the direction of such an impact.

Required
Indicate the effects of the previous transactions on each of the following: total current assets, total current liabilities, net working capital, and current ratio. Use + to indicate an increase, €“ to indicate a decrease, and 0 to indicate no effect. Assume an initial current ratio of more than 1 to1.

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Total Total Net Current Current Working Current Liabilities Capital Assets Ratio a. Cash is acquired through issuance of additional common stock b. Merchandise is sold for cash. (Assume a profit.) c. A fixed asset is sold for more than book value d. Payment is made to trade creditors for previous purchases. e. A cash dividend is declared and paid. f. A stock dividend is declared and paid. g. Cash is obtained through long-term bank loans. h. A profitable firm increases its fixed assets depreciation allowance account. i. Current operating expenses are paid. j. Ten-year notes are issued to pay off accounts payable k. Accounts receivable are collected . Equipment is purchased with short-term notes. m. Merchandise is purchased on credit. n. The estimated taxes payable are increased o. Marketable securities are sold below cost