Question: Park Corporation began the month of May with $650,000 of current assets, a current ratio of 2.50:1, and an acid-test ratio of 1.10:1. 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 $58,000 for $103,000 cash. 10 Collected $19,000 cash on an account receivable. 15 Paid $21,000 cash to settle an account payable. 17 Wrote off a $3,000 bad debt against the Allowance for Doubtful Accounts account. 22 Declared a $1 per share cash dividend on its 40,000 shares of outstanding common stock. 26 Paid the dividend declared on May 22. 27 Borrowed $75,000 cash by giving the bank a 30-day, 10% note. 28 Borrowed $90,000 cash by signing a long-term secured note. 29 Used the $165,000 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. Round ratios to two decimals.