The following is a list of transactions. a. Paid cash for short-term marketable securities. b. Purchased a
Question:
The following is a list of transactions.
a. Paid cash for short-term marketable securities.
b. Purchased a computer, issuing a short-term note for the purchase price.
c. Purchased factory equipment, issuing a long-term note for the purchase price.
d. Sold merchandise on account at a profit.
e. Paid cash on accounts payable.
f. Received cash from issuing common stock.
g. Sold a factory for cash at a profit.
h. Purchased raw materials on account.
i. Paid cash for property taxes on administrative buildings.
Required
Indicate the effect of each of the preceding transactions on (a) the quick ratio, (b) working capital, (c) stockholders’ equity, (d) the debt/equity ratio, (e) retained earnings. Assume that the current ratio is greater than 1:1.
Step by Step Answer:
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds