Reference no: EM131822226
Data pertaining to the current position of Boole Company are as follows:
Cash $240,000
Temporary investments 120,000
Accounts and notes receivable (net) 360,000
Inventories 380,000
Prepaid expenses 20,000
Accounts payable 140,000
Notes payable (short-term) 200,000
Accrued expenses 60,000
Instructions
1. Compute (a) the working capital, (b) the current ratio, and (c)the quick ratio. Round to one decimal place.
2. List the following captions on a sheet of paper:
Transaction Working Capital Current Ratio Quick Ratio
Compute the working capital, the current ratio, and the quick ratioafter each of the following transactions, and record the results in the appropriatecolumns. Consider each transaction separately and assume that only that transactionaffects the data given above. Round to one decimal place.
a. Sold temporary investments at no gain or loss, $45,000.
b. Paid accounts payable, $80,000.
c. Purchased goods on account, $50,000.
d. Paid notes payable, $100,000.
e. Declared a cash dividend, $80,000.
f. Declared a common stock dividend on common stock, $22,500.
g. Borrowed cash from bank on a long-term note, $200,000.
h. Received cash on account, $67,500.
i. Issued additional shares of stock for cash,
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