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PROBLEM 1 (15 Points) -em-off Industries had the following ratios based on its beginning 2017 financial statements. 1. Current ratio 1.4 2. Acid Test ratio 9.3 times 30 days $1.72 3. Accounts Receivable Turnover 4. Days in Inventory 5. Earnings per share During 2017 the following selected transactions and events occur a. Declared and Paid a cash dividend on common stock b. Purchased inventory on account c. Collected an Accounts Receivable REQUIRED: C the ratio would increase (+), decrease (), or h onsider items (a)-(c) individually, for each of the above ratios, indicate if ave no change(0) EPS CurrentAcid Test A/R Turnover Days in Inventory Ratio BLEM 2 (20 Points) ollowing information was contained in the financial statements of the uT s ornorat
Expert Answer
| Please find below the answer and please give thumbs up | |||||
| Statementshowing Computations | |||||
| Paticulars | Current Ratio | Acid test | A/R turnover | Days in inventory | EPS |
| a) Cash would decrease | Decrease(-) | Decrease(-) | No Change | No Change | No Change |
| b) Inventory would increase and also AP. So CA and CL would increase by same amount and Quick assets would remain same | Decrease(-) | Decrease(-) | No Change | No Change | No Change |
| c) AR would decrease and Cash would increase. Thus no effect on CA and QA | No Change | No Change | No Change | No Change | No Change |
