Current assets for JC Inc. totalled $33,760, and the current ratio was 160. Assume that the...

 

Transcribed Image Text:

Current assets for JC Inc. totalled $33,760, and the current ratio was 160. Assume that the following transactions were completed: (1) Purchased merchandise for $4,600 on short-term credit. (2) Purchased a delivery truck for $28,000-paid $3,598 cash and signed a two-year interest-bearing note for the balance. Required: 1. Determine without computations if the current ratio will increase, decrease, or remain unchanged after each transaction. Impact on Current Ratio Transaction (1) Transaction (2) 2. Compute the current ratio after each transaction. (Round the final answers to 2 decimal places.) Transaction (1) Transaction (2) Current Ratio Current assets for JC Inc. totalled $33,760, and the current ratio was 160. Assume that the following transactions were completed: (1) Purchased merchandise for $4,600 on short-term credit. (2) Purchased a delivery truck for $28,000-paid $3,598 cash and signed a two-year interest-bearing note for the balance. Required: 1. Determine without computations if the current ratio will increase, decrease, or remain unchanged after each transaction. Impact on Current Ratio Transaction (1) Transaction (2) 2. Compute the current ratio after each transaction. (Round the final answers to 2 decimal places.) Transaction (1) Transaction (2) Current Ratio

Answer rating: 100% (QA)

Lets compute the current ratio after each transaction ... View the full answer