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Gilchrist manufacturing has a current ratio of 31 on

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Reference no: EM13574758

Effect of transactions on current ratio and working capital

Gilchrist Manufacturing has a current ratio of 3:1 on December 31, 2008. Indicate whether each of the following transactions would increase (1), decrease (2), or have no affect (NA) Gilchrist's current ratio and its working capital.

Required

a. Paid cash for a trademark.

b. Wrote off an uncollectible account receivable.

c. Sold equipment for cash.

d. Sold merchandise at a profit (cash).

e. Declared a cash dividend.

f. Purchased inventory on account.

g. Scrapped a fully depreciated machine (no gain or loss).

h. Issued a stock dividend.

i. Purchased a machine with a long-term note.

j. Paid a previously declared cash dividend.

k. Collected accounts receivable.

l. Invested in current marketable securities.

Reference no: EM13574758

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