Effect of transactions on current ratio and working capitalLagory Manufacturing has a curr

Effect of transactions on current ratio and working capital

Lagory Manufacturing has a current ratio of 3:1 on December 31, 2006. Indicate whether each of the following transactions would increase (+), decrease (-), or not affect (NA) Lagory’s current ratio and its working capital.

Required

a. Paid cash for a trademark.

b. Wrote off an uncollectible account receivable.

c. Sold equipment for cash.

d. Sold merchandise at a profit (cash).

e. Declared a cash dividend.

f. Purchased inventory on account.

g. Scrapped a fully depreciated machine (no gain or loss).

h. Issued a stock dividend.

i. Purchased a machine with a long-term note.

j. Paid a previously declared cash dividend.

k. Collected accounts receivable.

l. Invested in current marketable securities.