Reference no: EM133132777

Question - A company has current assets that total $324,000, has a current ratio of 1.80, and uses the perpetual inventory method. Assume that the following transactions are then completed: (1) sold $13,700 in merchandise on short-term credit for $18,400, (2) declared but did not pay dividends of $43,000, (3) paid prepaid rent in the amount of $10,800, (4) paid previously declared dividends in the amount of $43,000, (5) collected an account receivable in the amount of $11,300, and (6) reclassified $33,000 of long-term debt as a current liability. Compute the updated current ratio after each transaction, by showing the cumulative effects of the transactions.