Question - Keener Incorporated had the following transactions occur involving current assets and current liabilities during February 2017.
Feb. 3 Accounts receivable of $14,400 are collected.
Feb. 7 Equipment is purchased for $27,200 cash.
Feb. 11 Paid $2,700 for a 1-year insurance policy.
Feb. 14 Accounts payable of $11,400 are paid.
Feb. 18 Cash dividends of 55,300 are declared.
Additional information:
1. As of February 1, 2017, current assets were $132,200, and current liabilities were $49,600.
2. As of February 1, 2017, current assets included $15,200 of inventory and $1,400 of prepaid expenses.
(a) Compute the current ratio as of the beginning of the month and after each transaction.
(b) Compute the acid-test ratio as of the beginning of the month and after each transaction.