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Business
Accounting
Cash $ 23,000 Accounts Receivable, Net 81,000 Merchandise Inventory 185,000 Total Assets 635,000 Accounts Payable 99,000 Accrued Liabilities 37,000 Short-term Notes Payable 51,000 Long-term Liabilities 224,000 Net Income 68,000 Common Shares Outstanding 20,000 shares Current Ratio Debt Ratio Earnings per Share

Cash $ 23,000 Accounts Receivable, Net 81,000 Merchandise Inventory 185,000 Total Assets 635,000 Accounts Payable 99,000 Accrued Liabilities 37,000 Short-term Notes Payable 51,000 Long-term Liabilities 224,000 Net Income 68,000 Common Shares Outstanding 20,000 shares Current Ratio Debt Ratio Earnings per Share

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Determining the effects of business transactions on selected ratios

Financial statement data of Style Traveler Magazine include the following items:

Requirements

  1. Compute Style Traveler’s current ratio, debt ratio, and earnings per share. Round all ratios to two decimal places, and use the following format for your answer:
  2. Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately

a. Purchased merchandise inventory of $49,000 on account.

b. Borrowed $127,000 on a long-term note payable.

c. issued 2,000 shares of common stock, receiving cash of $107,000.

d. Received cash on account, $5,000.

Cash $ 23,000 Accounts Receivable, Net 81,000 Merchandise Inventory 185,000 Total Assets 635,000 Accounts Payable 99,000 Accrued Liabilities 37,000 Short-term Notes Payable 51,000 Long-term Liabilities 224,000 Net Income 68,000 Common Shares Outstanding 20,000 shares
Transcribed Image Text:Cash $ 23,000 Accounts Receivable, Net 81,000 Merchandise Inventory 185,000 Total Assets 635,000 Accounts Payable 99,000 Accrued Liabilities 37,000 Short-term Notes Payable 51,000 Long-term Liabilities 224,000 Net Income 68,000 Common Shares Outstanding 20,000 shares
Current Ratio Debt Ratio Earnings per Share
Transcribed Image Text:Current Ratio Debt Ratio Earnings per Share
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