Daley, Inc. is consistently profitable. Daleys normal financial statement relationships are as follows: I. Current ratio: 3

Question:

Daley, Inc. is consistently profitable. Daley’s normal financial statement relationships are as follows:
I. Current ratio: 3 to 1
II. Inventory turnover: 4 times
III. Total debt/total assets ratio: 0.5 to 1
In 2007, Daley was involved in the following transactions and events:
1. Daley issued a stock dividend.
2. Daley declared, but did not pay, a cash dividend.
3. Customers returned invoiced goods for which they had not paid.
4. were paid on December 31, 2007.
5. Daley recorded both a receivable from its insurance company and a loss from fire damage to a factory building.
6. Early in 2007, Daley increased the selling price of one of its products that had a demand in excess of capacity. The number of units sold in 2006 and 2007 was the same.

Required
For items 1 through 6, determine whether each 2007 transaction or event increased (I), decreased (D), or had no effect (N) on each of the 2007 ratios.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...