Financial statement data of Metro Engineering Limited include the following items: Cash.......................................... $ 47,000 Accounts payable........................... $142,000 Short-term investments ............. 21,000 Accrued liabilities.......................... 50,000 Accounts receivable, net............ 102,000 Long-term notes payable ............... 146,000 Inventories ................................ 274,000 Other long-term liabilities ............. 78,000 Prepaid expenses....................... 15,000 Net income.................................... 104,000 Total assets ................................ 933,000 Number of common shares 22,000 Short-term notes payable ........... 72,000 outstanding ...............................

Requirements 1. Compute Metro's current ratio, debt ratio, and earnings per share. Use the following format for your answer (use dollar and share amounts in thousands except for EPS):

Requirement

1 Current ratio Debt ratio Earnings per share

2. Compute the three ratios after evaluating the effect of each transaction that follows.

Consider each transaction separately.

a. Borrowed $27,000 on a long-term note payable

b. Issued 10,000 common shares, receiving cash of $108,000

c. Paid short-term notes payable, $51,000

d. Purchased merchandise of $48,000 on account, debiting Inventory

e. Received cash on account, $6,000