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.
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.