Koto Corporation began the month of June with $300,000 of current assets, a current ratio of 2.5:1,
Question:
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, similar to the following, showing the company's (1) current ratio, (2) acid-test ratio, and (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 Principles
ISBN: 978-1259536359
23rd edition
Authors: John Wild, Ken Shaw, Barbara Chiappett
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