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Plum Corporation began the month of May with $1,100,000 of current assets, a current ratio of 2.20:1, and an acid-test ratio of 1.50:1. During the month, it completed the following transactions (the company uses a perpetual inventory system).
May 2 Purchased $60,000 of merchandise inventory on credit.
May 8 Sold merchandise inventory that cost $45,000 for $120,000 cash.
May 10 Collected $25,000 cash on an account receivable.
May 15 Paid $30,500 cash to settle an account payable.
May 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.
May 22 Declared a $1 per share cash dividend on its 60,000 shares of outstanding common stock.
May 26 Paid the dividend declared on May 22.
May 27 Borrowed $115,000 cash by giving the bank a 30-day, 10% note.
May 28 Borrowed $125,000 cash by signing a long-term secured note.
May 29 Used the $240,000 cash proceeds from the notes to buy new machinery.
Required:
Complete the table below showing Plum's
(1) current ratio,
(2) acid-test ratio, and
(3) working capital after each transaction.
can someone please help me fill out the blue boxes?
