Reference no: EM132726944
Question - Financial statement data for Tarrant, Inc. include the following items:
Cash $22,000
Short-term investments 33,000
Accounts receivable, net 87,000
Inventories 145,000
Prepaid expenses 9,000
Total assets $675,000
Short-term note payable $44,000
Accounts payable 102,000
Accured liabilities 37,000
Long-term notes payable 162,000
Other long-term liabilities 32,000
Net Income $95,000
Number of common shares outstanding 50,000
Requirements -
1. Calculate Tarrant, Inc. Current ratio, debt ratio and earnings per share. Round all ratios to decimal places.
2. Calculate the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately.
(a) Borrowed $140,000 on a long-term note payable
(b) On January 1, issued 30,000 shares of common stock, receiving cash of $367,000
(c) Paid off short-term notes payable, $27,000.
(d) Purchased $41,000 of merchandise on account, debiting inventory
(e) Received cash on account, $15,000