Arthur Ltd. has the following statement of financial position Statement of financial position before set-off Loans payable 1,000,000 Loans Receivable 1,200,000 Shareholders equity 1,000,000 Non-current assets 800,000 ----------- ------------ $ 2,000,000 $ 2,000,000 Assume that Arthur Ltd. has an amount owing to Blayney Ltd. of $ 300,000 and an amount receivable from Blayney Ltd. of $ 400,000. Need answers to the following; Assuming a right of set-off exists, why would Arthur Ltd. want to perform a set-off ? What would be the impact on the debt to-assets ratio?
Arthur Ltd. has the following
Statement of financial position before set-off
Loans payable 1,000,000 Loans Receivable 1,200,000
Shareholders equity 1,000,000 Non-current assets 800,000
----------- ------------
$ 2,000,000 $ 2,000,000
Assume that Arthur Ltd. has an amount owing to Blayney Ltd. of $ 300,000 and an amount receivable from Blayney Ltd. of $ 400,000.
Need answers to the following;
Assuming a right of set-off exists, why would Arthur Ltd. want to perform a set-off ?
What would be the impact on the debt to-assets ratio?
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