Park Corporation began the month of May with $1,100,000 of current assets, a current ratio of 2.10:1, and an acid-test ratio of 1.60:1. During the month, it completed the following transactions (the company uses a perpetual inventory system).
| May |
2 |
Purchased $75,000 of merchandise inventory on credit. |
|
8 |
Sold merchandise inventory that cost $60,000 for $130,000 cash. |
|
10 |
Collected $26,000 cash on an account receivable. |
|
15 |
Paid $30,000 cash to settle an account payable. |
|
17 |
Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account. |
|
22 |
Declared a $1 per share cash dividend on its 55,000 shares of outstanding common stock. |
|
26 |
Paid the dividend declared on May 22. |
|
27 |
Borrowed $90,000 cash by giving the bank a 30-day, 10% note. |
|
28 |
Borrowed $100,000 cash by signing a long-term secured note. |
|
29 |
Used the $190,000 cash proceeds from the notes to buy new machinery. |
| Required: |
|
Prepare a table showing Park's (1) current ratio, (2) acid-test ratio, and (3) working capital, after each transaction. (Do not round intermediate calculations. Round your ratios to 2 decimal places and the working capitals to nearest dollar amount. Omit the "$" sign in your response.)
|
| Transaction |
Current Ratio |
Acid-Test Ratio |
Working Capital |
| Beginning |
|
|
$ |
| May 2 |
|
|
|
| May 8 |
|
|
|
| May 10 |
|
|
|
| May 15 |
|
|
|
| May 17 |
|
|
|
| May 22 |
|
|
|
| May 26 |
|
|
|
| May 27 |
|
|
|
| May 28 |
|
|
|
| May 29 |
|
|
$ |