Effect of Transactions on Current Position Analysis

Data pertaining to the current position of Lucroy Industries Inc. are as follows:

Cash$800,000Marketable securities550,000Accounts and notes receivable (net)850,000Inventories700,000Prepaid expenses300,000Accounts payable1,200,000Notes payable (short-term)700,000Accrued expenses100,000

Required:

1. Compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. Round ratios to one decimal place.

a. Working capital$fill in the blank 1b. Current ratiofill in the blank 2c. Quick ratiofill in the blank 3

2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions, and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.

Transaction Working Capital Current Ratio Quick Ratioa. Sold marketable securities at no gain or loss, $500,000.$fill in the blank 4fill in the blank 5fill in the blank 6b. Paid accounts payable, $287,500.fill in the blank 7fill in the blank 8fill in the blank 9c. Purchased goods on account, $400,000.fill in the blank 10fill in the blank 11fill in the blank 12d. Paid notes payable, $125,000.fill in the blank 13fill in the blank 14fill in the blank 15e. Declared a cash dividend, $325,000.fill in the blank 16fill in the blank 17fill in the blank 18f. Declared a common stock dividend on common stock, $150,000.fill in the blank 19fill in the blank 20fill in the blank 21g. Borrowed cash from bank on a long-term note, $1,000,000.fill in the blank 22fill in the blank 23fill in the blank 24h. Received cash on account, $75,000.fill in the blank 25fill in the blank 26fill in the blank 27i. Issued additional shares of stock for cash, $2,000,000.fill in the blank 28fill in the blank 29fill in the blank 30j. Paid cash for prepaid expenses, $200,000.fill in the blank 31fill in the blank 32fill in the blank 33