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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 3
Effects of business transactions on selected ratios
Financial statement data of Road Trip Magazine include the following items:
Requirements
1. Compute Road Trip's current ratio, debt ratio, and earnings per share. Round all ratios to two decimal places, and use the following format for your answer:
2. Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately.
a. Purchased inventory of $45,000 on account.
b. Borrowed $127,000 on a long-term note payable.
c. Issued 2,000 shares of common stock, receiving cash of $105,000.
d. Received cash on account, $7,000.
Financial statement data of Road Trip Magazine include the following items:
Requirements
1. Compute Road Trip's current ratio, debt ratio, and earnings per share. Round all ratios to two decimal places, and use the following format for your answer:
2. Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately.
a. Purchased inventory of $45,000 on account.
b. Borrowed $127,000 on a long-term note payable.
c. Issued 2,000 shares of common stock, receiving cash of $105,000.
d. Received cash on account, $7,000.
Explanation
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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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