Koto Corporation began the month of June with $ 300,000 of current assets, a current ratio of
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June 1 Sold merchandise inventory that cost $ 75,000 for $ 120,000 cash.
3 Collected $ 88,000 cash on an account receivable.
5 Purchased $ 150,000 of merchandise inventory on credit.
7 Borrowed $ 100,000 cash by giving the bank a 60-day, 10% note.
10 Borrowed $ 120,000 cash by signing a long- term secured note.
12 Purchased machinery for $ 275,000 cash.
15 Declared a $ 1 per share cash dividend on its 80,000 shares of outstanding common stock.
19 Wrote off a $ 5,000 bad debt against the Allowance for Doubtful Accounts account.
22 Paid $ 12,000 cash to settle an account payable.
30 Paid the dividend declared on June 15.
Required
Prepare a table showing the company’s (1) Current ratio, (2) Acid-test ratio, (3) Working capital after each transaction. Round ratios to two decimals.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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