Reference no: EM131195695

Plum Corporation began the month of May with $700.000 of current assets. a current ratio of 2.50:1. and an acid-test ratio of 1.10:1. During the month. it completed the following transactions (the company uses a perpetual inventory system).

May 2 Purchased $50,000 of merchandise inventory on credit.
      8 Sold merchandise inventory that cost $55,000 for $110,000 cash.
     10 Collected $20,000 cash on an account receivable.
     15 Paid $22,000 cash to settle an account payable.
     17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.
     22 Declared a $1 per share cash dividend on its 50,000 shares of outstanding common stock.
     26 Paid the dividend declared on May 22.
     27 Borrowed $100,000 cash by giving the bank a 30-day. 10% note.
     28 Borrowed $80,000 cash by signing a long-term secured note.
     29 Used the $180,000 cash proceeds from the notes to buy new machinery.

Required:

Prepare a table showing Plum's
(1) current ratio,
(2) acid-test ratio, and
(3) working capital after each transaction. (Do not round intermediate calculations. Round your ratios to 2 decimal places and the working capitals to nearest dollar amount. Subtracted amount should be indicated with a minus sign.)

Attachment:- Question.rar