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PROBLEM III (25 points) tons: Indicate the effects of the transactions listed below on of the following: Use a "+" to indicato an increase to dedicate a decrease and a "0" to indicate no effect. Assume an initial current ratio of greater than 1.0. a Debt Ratio of 50% and a Debt-to- Horth of 1.0 x Transaction Net Working Capital Current Ratio Debt Ratio Net Income Stock- holders Equity 1. A cash dividend is declared and paid 2. Cash is obtained through long-term bank loans. (Do not consider interest) 3. Equipment is purchased with short-term notes. (Do not consider interest) 4. Merchandise is purchased on credit 5. A fixed asset is sold for more than book value 6. Astock split takes effect 7. Current opera- ting expenses. not previously recognized are paid 8. A firm makes a long- term cash investment in the stock of a non-consolidated subsidiary 9. A fire recognizes depreciation expense PROBLEM III (25 points) tons: Indicate the effects of the transactions listed below on of the following: Use a "+" to indicato an increase to dedicate a decrease and a "0" to indicate no effect. Assume an initial current ratio of greater than 1.0. a Debt Ratio of 50% and a Debt-to- Horth of 1.0 x Transaction Net Working Capital Current Ratio Debt Ratio Net Income Stock- holders Equity 1. A cash dividend is declared and paid 2. Cash is obtained through long-term bank loans. (Do not consider interest) 3. Equipment is purchased with short-term notes. (Do not consider interest) 4. Merchandise is purchased on credit 5. A fixed asset is sold for more than book value 6. Astock split takes effect 7. Current opera- ting expenses. not previously recognized are paid 8. A firm makes a long- term cash investment in the stock of a non-consolidated subsidiary 9. A fire recognizes depreciation expense

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