Global Ltd had the following transactions involving current assets and current liabilities during February 2016. 

Additional information:

1. As of 1 February 2016, current assets were $200 000 and current liabilities were $100 000.

2. As of 1 February 2016, current assets included $25 000 of inventory and $5000 of prepaid expenses.

Required

(a) Calculate the current ratio as of the beginning of the month and after each transaction.

(b) Calculate the quick ratio as of the beginning of the month and after each transaction.

Transcribed Image Text:

7 Feb. 3 Collected accounts receivable of $15000. Purchased equipment for $25 000 cash. Paid $3000 for a 1-year insurance policy. Paid accounts payable of $14000. 11 14 18 Declared cash dividends of $6000 to be paid in March.