Plum Corporation began the month of May with $700,000 of current assets, a current ratio of 2.50:1, and an acid-test ratio of 1.10:1. During the month, it completed the following transactions (the company uses a perpetual inventory system).
| May | 2 | Purchased $50,000 of merchandise inventory on credit. | ||
| 8 | Sold merchandise inventory that cost $55,000 for $110,000 cash. | |||
| 10 | Collected $20,000 cash on an account receivable. | |||
| 15 | Paid $22,000 cash to settle an account payable. | |||
| 17 | Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account. | |||
| 22 | Declared a $1 per share cash dividend on its 50,000 shares of outstanding common stock. | |||
| 26 | Paid the dividend declared on May 22. | |||
| 27 | Borrowed $100,000 cash by giving the bank a 30-day, 10% note. | |||
| 28 | Borrowed $80,000 cash by signing a long-term secured note. | |||
| 29 | Used the $180,000 cash proceeds from the notes to buy new machinery. |
Required:
Complete the table below showing Plum's (1) current ratio, (2) acid-test ratio, and (3) working capital after each transaction. (Do not round intermediate calculations. Round your ratios to 2 decimal places and the working capitals to nearest dollar amount. Subtracted amount should be indicated with a minus sign.)
