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Exercise 13-8 (Static) Analyzing effect of transactions on current ratio LO P3 On January 1,...

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Accounting

Exercise 13-8 (Static) Analyzing effect of transactions on current ratio LO P3

On January 1, 5G Co. reported current assets of $72,000 and current liabilities of $60,000. Compute total current assets, total current liabilities, and the current ratio at January 1 and after each of the following transactions. (Round current ratio to two decimal places. Amounts to be deducted should be indicated with a minus sign.)

Jan. 5 Purchased equipment to be used in operations for $18,000 cash.
Jan. 12 Paid $5,000 cash for accounts payable.
Jan. 18 Acquired a building in exchange for a $99,000 long-term note payable, first payment to occur in 3 years.
Jan. 22 Purchased $12,000 of merchandise on credit, terms n/45.
Jan. 31 Sold outdated machinery for $12,700 cash.

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