Financial statement data of Pacific Traveler magazine include the following items (dollars in thousands):
Cash .................................................................................................................... $ 24,500
Accounts receivable, net ..................................................................................... $ 83,000
Inventories ......................................................................................................... $180,500
Total assets ........................................................................................................ $660,000
Short-term notes payable ................................................................................... $ 49,500
Accounts payable ............................................................................................. $106,000
Accrued liabilities ............................................................................................. $ 44,500
Long-term liabilities .........................................................................................$182,800
Net income ........................................................................................................$ 63,180
Common shares outstanding ...............................................................................54,000
Requirements
1. Compute Pacific Traveler's current ratio, debt ratio, and earnings per share. Round all ratios to two decimal places.
2. Compute the three ratios after evaluating the effect of each transaction that follows.
Consider each transaction separately.
a. Purchased inventory on account, $75,000
b. Borrowed $264,000 on a long-term note payable
c. Issued 6,750 shares of common stock, receiving cash of $210,000
d. Received cash on account, $20,500