Compute the current ratio as of the beginning of the month

Assignment Help Accounting Basics

Reference no: EM131971756

Problem

Robin Incorporated has the following potential transactions involving current assets and current liabilities.

1. Accounts receivable of $20,000 are collected.
2. Equipment is purchased for $37,000 cash.
3. Equipment is purchased by signing a 1-year, $37,000 note.
4. Paid $6,000 for a 3-year insurance policy.
5. Paid $16,000 of accounts payable.
6. Cash dividends of $7,000 are declared.
7. Borrowed $40,000 by signing a short-term note payable.
8. Paid $50,000 short-term note payable.

As of the beginning of the month, current assets were $175,000, and current liabilities were $120,000. Current assets included $45,000 of inventory and $5,000 of prepaid expenses.

Instructions:

(a) Compute the current ratio as of the beginning of the month.
(b) Compute the current ratio after each transaction. Treat each transaction independently (assume each occurs on the first day of the month, and no other transactions have affected the beginning-of-month balances.

Reference no: EM131971756

Questions Cloud

Use sql statement to construct the queries : For each crew, if the crew is allergic to no flowers that grow on his/her hometown, then list the crew's name.

Prepare the adjusting entries on january : Prepare the adjusting entries on January 31. Account titles are Accumulated Depreciation-Equipment, Depreciation Expense, Service Revenue, Accounts Receivable.

What did you learn from the experience : How will you apply the principles you have learned in this course in your professional career? Give specific examples.

Evaluating a project for the tiff-any golf club : You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $410.

Compute the current ratio as of the beginning of the month : Robin Incorporated has the potential transactions involving current assets and current liabilities. Compute the current ratio as of the beginning of the month.

Identifies and evaluates the impact that federal policy have : In response to federal policy and service requirements, health insurance plans are increasingly developing high-deductible insurance policies and narrow network

Current culture in the twenty-first century : What new ideas and scientific explorations shape our current culture in the twenty-first century?

Compare public and private budget preparation strategies : Write a 700- to 1,050-word paper in which you compare public and private budget preparation strategies.

Use of mobile devices for business operations : Discuss the advantages and disadvantages of the use of mobile devices for business operations.

User Account

All Pages