Many Companies Have to Monitor Closely Certain Ratios, Such as the Current

Many companies have to monitor closely certain 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 and a quick ratio of 1.19 before the event occurred.Required:
In the above table, indicate whether each transaction would increase (+), decrease (-), or not affect (0) the company's current ratio and quick ratio. $$\begin{array} { | l | c | c | } \hline & \text { Impact on } & \text { Impact on } \\\hline & \text { Current Ratio } & \text { Quick Ratio } \\\hline \text { Description of Transaction } & (+) \text { or }(-) \text { or }(0) & (+) \text { or }(-) \text { or (0) } \\\hline \text { 1. Collected accounts receivable } & & \\\hline \text { 2. Issued common stock for cash } & & \\\hline \text { 3. Purchased one-year insurance policy } & & \\\hline \text { 4. Paid previously declared cash dividend } & & \\\hline \text { 5. Paid the balance on an account payable } & & \\\hline \text { 6. Purchased a bualding by issuing a long- } & & \\ \text { term note } & & \\\hline \text { 7. Purchased inventory on account } & & \\\hline \text { 8. Purchased current marketable securities for } & & \\ \text { cash } & & \\\hline \text { 9. Sold merchandise for cash } & & \\\hline \text { 10. Sold merchandise on account } & & \\\hline\end{array}$$