Current assets for Clarke Inc. totalled $ 1,000,000, the current ratio was 2.0, and the company uses the periodic inventory method.
Assume that the following transactions were completed:
(1) Sold $ 26,000 in merchandise on account,
(2) Declared but did not pay dividends of $ 40,000,
(3) Paid rent in advance in the amount of $ 24,000,
(4) Paid previously declared dividends in the amount of $ 40,000,
(5) Collected a trade receivable in the amount of $ 20,000,
(6) Reclassified $ 90,000 of long-term debt as a short- term liability.
Required:
Compute the current ratio after each transaction.