Burnes Consulting Company reported these ratios at December 31, 2018 (dollar amounts in millions): Burnes Consulting completed

Question:

Burnes Consulting Company reported these ratios at December 31, 2018 (dollar amounts in millions):

Current ratio $20 = 2.00 $10 Debt ratio $30 = 0.50 $60

Burnes Consulting completed these transactions during 2019:

a. Purchased equipment on account, $4

b. Paid long-term debt, $7

c. Collected cash from customers in advance, $5

d. Accrued interest expense, $6

e. Made cash sales, $8

Determine whether each transaction improved or hurt the company’s current ratio and debt ratio.

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Related Book For answer-question

Financial Accounting

ISBN: 978-0134725987

12th edition

Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

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Question Posted: Jun 13, 2019 10:04 AM

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Burnes Consulting Company reported these ratios at December 31, 2018 (dollar amounts in millions): Burnes Consulting completed

Question:

Current ratio $20 = 2.00 $10 Debt ratio $30 = 0.50 $60

Step by Step Answer:

a The purchase of equipment on account hurts both ratios b The ...View the full answer

Financial Accounting

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