Financial statement data of Road Trip Magazine include the following items:

Cash . . . . . . . . . . . . . . . . . . . . . . $ 24,000

Accounts receivable, net . . . . . . .  82,000

Inventories . . . . . . . . . . . . . . . . .  188,000

Total assets . . . . . . . . . . . . . . . . .  638,000

Accounts payable . . . . . . . . . . . .  99,000

Accrued liabilities . . . . . . . . . . . .  39,000

Short-term notes payable . . . . . . 51,000

Long-term liabilities . . . . . . . . . .  223,000

Net income . . . . . . . . . . . . . . . . .  72,000

Common shares outstanding . . .  20,000

Requirements

1. Compute Road Trip’s current ratio, debt ratio, and earnings per share. Round all ratios to two decimal places, and use the following format for your answer:

.:.

2. Compute the three ratios after evaluating the effect of each transaction that follows.

Consider each transaction separately.

a. Purchased inventory of $45,000 on account.

b. Borrowed $127,000 on a long-term note payable.

c. Issued 2,000 shares of common stock, receiving cash of $105,000.

d. Received cash on account, $7,000.

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Debt Ratio Earnings per Share Current Ratio