Question

Financial statement data of Style TravelerStyle Traveler magazine include the following items​ (dollars in​ thousands):

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Requirements

1.	Compute Style TravelerStyle Traveler​'s current​ ratio, debt​ ratio, and earnings per share. Round all ratios to two decimal places.
2.	Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately.
	a. Purchased inventory on​ account, $60,000 Borrowed $170,000 on a​ long-term note payable c. Issued 7,500 shares of common​ stock, receiving cash of $ 136 comma 000$136,000 d. Received cash on​ account, $20,000

Requirement 1. Compute

Style TravelerStyle Traveler​'s

current​ ratio, debt​ ratio, and earnings per share. Round all ratios to two decimal places.

	Current Ratio	Debt Ratio	Earnings per Share
	1.39	0.60	$1.35

Requirement 2. Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction

separately.

a. Purchased inventory on​ account,$60,000

b. Borrowed $170,000 on a​long-term note payable c. Issued 7,500 shares of common​ stock, receiving cash of $136,000

d. Received cash on​ account,$20,000.

​(Round your answers to two decimal​ places.)

Transaction	Current Ratio	Debt Ratio	Earnings per Share
a.

DATA TABLE

Cash. . . . . . . . . . . . . . . . . . . . . . . . . .

$25,000

Accounts receivable, net. . . . . . . . . . . .

$83,500

Inventories. . . . . . . . . . . . . . . . . . . . . .

$169,500

Total assets. . . . . . . . . . . . . . . . . . . . .

$680,000

Short-term notes payable. . . . . . . . . .

$51,500

Accounts payable. . . . . . . . . . . . . . . . .

$105,000

Accrued liabilities. . . . . . . . . . . . . . . . .

$43,500

Long-term liabilities. . . . . . . . . . . . . .

$208,000

Net income. . . . . . . . . . . . . . . . . . . . . .

$81,000

Common shares outstanding. . . . . . . . .

60,000

Answer 1