Solution-Compute the current ratio as of the beginning of

Compute the current ratio as of the beginning of the month

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Reference no: EM132625591

Question - Keener Incorporated had the following transactions occur involving current assets and current liabilities during February 2017.

Feb. 3 Accounts receivable of $15,000 are collected.

Feb. 7 Equipment is purchased for $28,000 cash.

Feb. 11 Paid $3,000 for a 3-year insurance policy.

Feb. 14 Accounts payable of $12,000 are paid.

Feb. 18 Cash dividends of $5,000 are declared.

Additional information -

1. As of February 1, 2017, current assets were $110,000, and current liabilities were $50,000.

2. As of February 1, 2017, current assets included $15,000 of inventory and $2,000 of prepaid expenses.

Instructions -

(a) Compute the current ratio as of the beginning of the month and after each transaction.

(b) Compute the acid-test ratio as of the beginning of the month and after each transaction.

Reference no: EM132625591

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Compute the current ratio as of the beginning of the month

Reference no: EM132625591

Reference no: EM132625591

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