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Penultimate, Inc. is consistently profitable. (But last year, it was second from bottom!) Its normal financial relationships are as follows: C1 = NI + oci Current ratio 3 to 1 23 = 1974 Inventory turnover 4 times LT debt/TA ratio 0.5 to 1 Required: Determine whether each transaction or event that follows increased, decreased, or had no effect on each ratio. Consider each transaction independently of the others. a. Penultimate declared but did not pay a cash dividend. b. Customers returned invoiced goods for which they had not paid. c. A/P were paid at year-end. d. Penultimate recorded both a receivable from an insurance company and a loss from fire damage to a factory building. e. Early in the year, Penultimate increased the selling price of one of its products because customer demand far exceeded production capacity. The number of units sold this year was the same as last year.

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