Managerial Accounting: E14-6 Leach Incorporated had the following transactions occur

Managerial Accounting

E14-6
Leach Incorporated had the following transactions occur involving current assets and current liabilities during February 2011.
Feb. 3 Accounts receivable of 15,000 are collected.
7 Equipment is purchased for 28,000 cash.
11 Paid 3,000 for a 3-year insurance policy.
14 Accounts payable of 12,000 are paid.
18 Cash dividends of 5,000 are declared.
Additional information:
1. As of February 1, 2011, current assets were 130,000, and current liabilities were 50,000.
2. As of February 1, 2011, current assets included 15,000 of inventory and 2,000 of prepaid expenses.

Requirement:
a. Compute the current ratio as of the beginning of the month and after each transaction. (Round answers to 1 decimal place, e.g. 10.5.)
b. Compute the acid-test ratio as of the beginning of the month and after each transaction. (Round answers to 1 decimal place, e.g. 10.5.)
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