05 Feb Refer to the Tree City Sporting Goods Company data
Refer to the Tree City Sporting Goods Company data in Short Exercise 3-17. At July 31, 2016, Tree City Sporting Goods Company s current ratio was 1.90 (rounded) and its debt ratio was 0.45 (rounded). Compute Tree City s (a) Net working capital, (b) Current ratio, and (c) Debt ratio after each of the following transactions (all amounts in thousands, as in the Tree City financial statements): 1. Tree City earned revenue of $12,000 on account. 2. Tree City paid off accounts payable of $12,000. When calculating the revised ratios, treat each of the above scenarios independently. Round ratios to two decimal places.