Reference no: EM132494366

Question - Data pertaining to the current position of Forte Company follow:

Cash $430,000

Marketable securities 160,000

Accounts and notes receivable (net) 330,000

Inventories 700,000

Prepaid expenses 50,000

Accounts payable 240,000

Notes payable (short-term) 245,000

Accrued expenses 285,000

1. Compute (A) the working capital, (B) the current ratio, and (C) the quick ratio. Round ratios to one decimal place.

2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns of the table provided. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.

A. Sold marketable securities at no gain or loss, $50,000.

B. Paid accounts payable, $105,000.

C. Purchased goods on account, $105,000.

D. Paid notes payable, $120,000.

E. Declared a cash dividend, $160,000.

F. Declared a common stock dividend on common stock, $35,000.

G. Borrowed cash from bank on a long-term note, $200,000.

H. Received cash on account, $120,000.

I. Issued additional shares of stock for cash, $565,000.

J. Paid cash for prepaid expenses, $10,000.