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Show the Effect of the Following Transactions on Cash, Net

question 80

Essay

Show the effect of the following transactions on cash, net working capital, and the current ratio. Assume that the current ratio exceeds 1.0 to begin.
a. The firm borrows $1,000 short term and pays $500 in accounts payable.
b. The firm factors $1,000 in receivables at a 5% discount.
c. The firm issues $1,000 in long-term bonds, using the proceeds to pay $800 in payables and purchase $200 in marketable securities.


Definitions:

Whale Songs

Complex sequences of vocalizations produced by whales, particularly males, that are thought to play a role in communication and mating behaviors.

Functions

The natural purpose or activities associated with a person, organ, or system in biology, or a specific role or activity in more general contexts.

Birdsong

Vocalized sounds produced by birds, which can serve various functions including communication and mating.

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