Many Companies Have to Monitor Some of Their Financial Statement

Many companies have to monitor some of their financial statement ratios, such as the current ratio, due to debt covenants. Selected transactions are provided below for a company that uses a perpetual inventory system; sells its merchandise at a selling price that exceeds cost; and had a current ratio of 1.85 before the event occurred.Required:
In the above table, indicate whether each transaction would increase (+), decrease (-), or not affect (0) the company's working capital and the current ratio. $\begin{array}{|l|c|c|}\hline & \text { Impact on } & \text { Impact on } \\\hline & \text { Working Capital } & \text { Current Ratio } \\\hline \text { Description of Transaction } & (+) \text { or }(-) \text { or }(0) & (+) \text { or }(-) \text { or }(0) \\\hline \text { 1. Collected accounts receivable } & \\\hline \text { 2. Declared a stock dividend } & \\\hline \text { 3. Issued common stock for cash } & \\\hline \text { 4. Paid advertising cost } & \\\hline \text { 5. Paid cash for a patent } & \\\hline \text { 6. Paid previously declared cash dividend } & \\\hline \text { 7. Paid sales commissions } \\\hline \text { 8. Paid the balance on an account payable } \\\hline \text { 9. Purchased a building by issuing a long. } \\\hline \text { term note } \\\hline \text { 10. Purchased inventory on account } \\\hline \text { 11. Purchased current marketable securities for }\\\text { cash } & \\\hline 12 . \text { Recorded depreciation expense } & \\\hline 13 . \text { Sold land for cash } & \\\hline 14 . \text { Sold merchandise for cash } & \\\hline 15 . \text { Sold merchandise on account } & \\\hline\end{array}$