A Cash flow stateme x QFrom a standard 5x Cash Flow Stateme Employee-facing · x

Question

A Cash flow stateme x QFrom a standard 5x Cash Flow Stateme Employee-facing · x | . Course: ACCO 23c × Y? WileyPLUS xC Chegg Study | Guic x + https//edugen.wileyplus.com/edugen/lti/main.uni C Search Burnley, Understanding Financial Help I System Announcements BACK NEXT Application Problem 12-16 (Transaction effects on ratios) Two lists follow: one for ratios (including the ratio prior to the transactions) and another for transactions. ASSIGNMENT RESOURCES Marks Ratios: 1. 2. 3. 4. 5. 6. Current ratio, 1.2:1 Quick ratio, 0.6:1 Accounts receivable turnover, 12 tines Inventory turnover, 6 times Return on assets, 10% Return on equity, 15% Part Lev Proble 8 (Part Level Application Problem 11-12 (Part Level Transactions: 1. Goods costing $200,000 are sold to customers on credit for $380,000 2. Accounts receivable of $140,000 are colected 3. Inventory costing $110,000 is purchased from suppliers. 4. A long-term bank loan for $500,000 is arranged with the bank, and the company receives the cash at the beginning of the year 5. The bank loan carnes an interest rate of 18% and the interest payment is made at the end of the year. Assume no interest expense had previously been recognized. 6. The company uses $40,000 to buy short-term investments. 7. New common shares are issued for $250,000 Application Proble Review Score Review Results by Study Objective State the immediate effect (increase, decrease, or no effect) of each transaction on each ratio RatioCurrent ratio Quick ratio A/R turnover Inventory turnover ROA of 10% ROE of 15% Transaction of 1.2 to 1 of 0.6 to1 of 12 times of 6 times 0430 p.m 13/04/2018 Pür

Explanation / Answer

1 2 3 4 5 6 1 Increase Increase No effect Increase Decrease No effect 2 Decrease Decrease Decrease No effect Increase No effect 3 No effect Decrease No effect Increase No effect No effect 4 Increase Increase No effect No effect No effect No effect 5 Decrease Decrease No effect No effect Decrease Decrease 6 No effect No effect No effect No effect No effect No effect 7 Increase Increase No effect No effect No effect Decrease

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