Effect of transactions on current ratio and working capital

Sherman Manufacturing has a current ratio of 3:1 on December 31, 2011. Indicate whether each of the following transactions would increase (+), decrease (), or have no affect (NA) Sherman’s current ratio and its working capital.


 a. Paid cash for a trademark.

 b. Wrote off an uncollectible account receivable.

 c. Sold equipment for cash.

 d. Sold merchandise at a profit (cash).

 e. Declared a cash dividend.

 f. Purchased inventory on account.

 g. Scrapped a fully depreciated machine (no gain or loss).

 h. Issued a stock dividend.

 i. Purchased a machine with a long-term note.

 j. Paid a previously declared cash dividend.

 k. Collected accounts receivable.

 l. Invested in current marketable securities.

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