Data pertaining to the current position of Forte Company are as follows:


Cash

$412,500



Marketable securities

187,500



Accounts and notes receivable (net)

300,000



Inventories

700,000



Prepaid expenses

50,000



Accounts payable

200,000



Notes payable (short-term)

250,000



Accrued expenses

300,000








Required:


1.
Compute (A) the working capital, (B) the current ratio, and (C) the quick ratio. Round ratios to one decimal place.


2.
Compute the working capital, the current ratio, and the quick ratio after each of the following transactions, and record the results in the appropriate columns of the table provided. Consider each transaction separately and assume that only that transaction affects the data given. Round to one decimal place.

A.
Sold marketable securities at no gain or loss, $70,000.


B.
Paid accounts payable, $125,000.


C.
Purchased goods on account, $110,000.


D.
Paid notes payable, $100,000.


E.
Declared a cash dividend, $150,000.


F.
Declared a common stock dividend on common stock, $50,000.


G.
Borrowed cash from bank on a long-term note, $225,000.


H.
Received cash on account, $125,000.


I.
Issued additional shares of stock for cash, $600,000.


J.
Paid cash for prepaid expenses, $10,000.

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