Selected balance sheet accounts for Tibbetts Company on September 30, 2019, are as follows:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 48,000Marketable securities . . . . . . . . . . . . . .... . . . . . . . . . . . . . . . . . . . . . . . . . 87,000Accounts receivable, net . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . 129,000Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,000Prepaid expenses . . . . . . . . . . . . . . . . . . . .... . . . . . . . . . . . . . . . . . . . . . . 21,000Total current assets . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . $420,000Accounts payable . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . $147,000Other accrued liabilities . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . 33,000Short-term debt . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 60,000Total current liabilities . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . $240,000

Required:

a. Calculate the working capital, current ratio, and acid-test ratio for Tibbetts Company as of September 30, 2019.

b. Summarized here are the transactions/events that took place during the fiscal year ended September 30, 2020. Indicate the effect of each item on Tibbetts Company?s working capital, current ratio, and acid-test ratio. Use + for increase, for decrease, and (NE) for no effect. [Hint: It may be helpful to use the horizontal model or to record the journal entry(ies) for each item before considering the effects on liquidity measures.]

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Transaction/Event Working Capital Current Acid-Test Ratio Ratio 0. Example: Paid accounts payable, $585,000. 1. Credit sales for the year amounted to $360,000. The cost of goods sold was $234,000. 2. Collected accounts receivable, $378,000. NE 3. Purchased inventory on account, $252,000. 4. Issued 250 shares of common stock for $54 per share. 5. Wrote off $10,500 of uncollectible accounts using the allowance for bad debts. 6. Declared and paid a cash dividend, $30,000. 7. Sold marketable securities costing $39,000 for $46,500 in cash. 8. Recorded insurance expense for the year, $18,000. The premium for the policy was paid in June 2019. 9. Borrowed cash on a short-term bank loan, $15,000. 10. Repaid principal of $60,000 and interest of $4,500 on a long-term bank loan.