Hermann Company reported these ratios at December 31, 2014 (dollar amounts in millions):Current…


Hermann Company reported these ratios at December 31, 2014 (dollar amounts in millions):Current ratio = $50 / $40 = 1.25Debt ratio = $40 / $70 = 0.57Hermann Company completed these transactions during 2015:a. Purchased equipment on account, $8b. Paid long-term debt, $5c. Collected cash from customers in advance, $7d. Accrued interest expense, $2e. Made cash sales, $6Determine whether each transaction improved or hurt Hermann’s current ratio and debt ratio.View Solution:
Hermann Company reported these ratios at December 31 2014 dollar

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