Recording effect of transactions


Q1) There are five traditional financial indicators recognized below for Lipscomb Inc.  Suppose that each indicator is a ratio greater than one. By using a matrix with 5 columns for indicators and 10 rows for transactions, record  effect each of following transactions of Lipscomb would have on each indicator.  Respond with increase, decrease, no effect by using symbols:  +, < >, 0 respectively.

Quick (Acid-test) Ratio

Accounts Receivable Turnover

Earnings per Share

Debt/Assets

Dividend Payout Rate

Transactions:

1. Purchased inventory on account

2. Sold inventory below its cost at a loss

3. Collected an account receivable from a customer

4. Issued bonds for cash from long-term creditors

5. Sold common stock for cash to new stockholders

6. Sold marketable securities at a loss

7. Declared a dividend on common stock

8. Sold land for cash at a gain

9. Received cash in advance from a customer (not yet earned)

10. Purchased common stock for the treasury

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Accounting Basics: Recording effect of transactions
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