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Compute the updated current ratio after each transaction

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Question - A company has current assets that total $225,000, has a current ratio of 1.50, and uses the perpetual inventory method. Assume that the following transactions are then completed: (1) sold $14,000 in merchandise on short-term credit for $19,000, (2) declared but did not pay dividends of $39,000, (3) paid prepaid rent in the amount of $10,800, (4) paid previously declared dividends in the amount of $39,000, (5) collected an account receivable in the amount of $11,000, and (6) reclassified $30,000 of long-term debt as a current liability.

Required - Compute the updated current ratio after each transaction, by showing the cumulative effects of the transactions.

Reference no: EM133147226

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