The following is attached to the company's financial statements, pay attention to the noncurrent liabilities and shareholders’ equity sections.Questions:a. Based on the financial statements above, explain possible “debt to equity swap” scheme carried out by the client!b. What evidence do you need to collect to ensure that the client's debt to equity swap is free from material misstatement? Catatan/Notes20102009LIABILITIES ANDSHAREHOLDERS' EQUITYKEWAJIBAN DAN EKUITASKEWAJIBAN LANCARCURRENT LIABILITIESShort-term bank loansTrade payables - Third partiesTaxes payableOther payablesAccrued expensesAdvance on sales63.218.778.659 2b,h,m,q,10,2416.049.325.984 2b,1,m,q,11,243.289.221.216Pinjaman bank jangka pendekHutang usaha - Pihak ketigaHutang pajakHutang lain-lainBiaya masih harus dibayarUang muka penjualanBagian kewajiban jangka panjangyang jatuh tempo dalam waktusatu tahun59.461.174.39011.810.234.60176.862.64244.048.1871.259.063.8302n,20b1.322.870.535896.800.000122b,4153.161.300 2b,h,m,q,13,24Current maturities of long-termdebts9.120.148.381Jumlah Kewajiban Lancar84.930.157.69481.771.532.031Total Current LiabilitiesKEWAJIBAN TIDAK LANCARKewajiban jangka panjang - setelahdikurangi bagian yang jatuhtempo dalam waktu satu tahunKewajiban pajak tangguhan - BersihKewajiban diestimasi imbalanpasca-kerjaNON-CURRENT LIABILITIESLong-term debts - net ofcurrent maturitiesDeferred tax liabilities - NetEstimated liabllities forpost-employment benefits128.338.374 2b,h,m,q,13,2418.457.040.32845.066.961.09018.329.375.9002n,20d1.975.245.05621,221.588.160.200Jumlah Kewajiban Tidak Lancar20.560.623.75864.984.497.190Total Non-Current LiabilitiesJumlah Kewajiban105.490.781.452146.756.029.221Total LiabilitiesEKUITASModal saham - nilai nominalRp 100 per sahamModal dasar - 4.000.000.000sahamModal ditempatkan dan disetorpenuh - 1.500.000.000 saham(2009: 1.300.000.000 saham)Tambahan modal disetor - BersihSaldo labaSHAREHOLDERS' EQUITYShare capital - par value Rp 100per shareAuthorized - 4,000,000,000sharesIssued and fully paid -1,500,000,000 shares(2009: 1,300,000,000 shares)Additional pald-In capital - NetRetained earnings150.000.000.00033.542.841.148130.000.000.0004.367.923.96821.257.157.437142k, 1545.916.926.397Jumlah Ekuitas229.459.767.545155.625.081.405Total Shareholders' EquityJUMLAH KEWAJIBAN DANTOTAL LIABILITIES ANDEKUITAS334.950.548.997302.381.110.626SHAREHOLDERS' EQUITY

It means translation of Debt into Equity Capital. It is a refinancing deal to cancel the debt in…

Answered: ossible “debt to equity swap” scheme…

Business

Accounting

ossible “debt to equity swap” scheme carried out by the client!

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

How do creditors assess risk when lending funds to a company? a. By establishing covenants in the borrowing agreement b. By monitoring the borrower’s debt-to-equity ratio c. By checking a prospective borrower’s credit rating before lending to it d. All of the above answers are correct.
Financial Institutions have Off-Balance-Sheet acitivities mainly (Commitment Loans; Letter of Credits; Loans slold, and Derivative contracts). What are the potential advantages and risks exposed of these activities?
3. a. List and describe three types of deferred credits? b. Do they meet the definition of a liability? Of short or long term? c. Why do some accountants not consider them to be a liability? d. Do deferred credits affect liquidity? 4. List and discuss four reasons a company would prefer to issue debt rather than equity securities. 5. When and why should liabilities for each of the following items be recorded on the books of an ordinary business corporation? a. Purchase of goods on account. b. Officers' salaries c. Dividends d. Interest e. Loss contingencies
1. Statement 1: Financial securities are instruments that can be transferred or sold easily throughestablished financial markets.Statement 2: Financial securities uses physical certificates that sellers (holders) need to seek theapproval and signature of the issuer to be transferred to the buyer.Statement 3: Financial securities are tradeable through established market or over-the counter.Statement 4: Financial securities hold monetary value or face value that is equivalent to their sellingprice.Statement 5: Financial securities are fungible that can be converted into assets or cash.a.All statements are true b.Statements 1, 2 and 3 are true c.Statements 2, 3 and 4 are trued.Statements 3, 4 and 5 are true e.Statements 1, 3 and 5 are true f. Statements 2, 4 and 5 are true 2. Statement 1: Debt securities represent ownership in a firm that would entitle the holders certaindividends and claims in a firm.Statement 2: Equity securities are loans made by the issuing firm that would entitle the…
Substantial doubt exists regarding a client's ability to continue. The client must present its plans to mitigate the effects of the events and conditions. Which item is NOT an acceptable plan? a. Restructure debt to delay due date of Bonds Payable. b. Sell assets used in product production for cash. c. Issue Common Stock at market value. d. Decrease dividend requirements. e. Obtain cash by issuing notes.
1.What are the benefits and costs to an FI of holding large amounts of liquid assets? Why are Treasury securities considered good examples of liquid assets? 2. What are the primary methods that insurance companies can use to reduce their exposure to liquidity risk?
1. When issuing commercial paper, it is important for a company to have: A: a party to act as an acceptor and guarantee payment B: collateral to attach to the issue C: a well-established reputation in the markets 2. Which type of financial claim is not satisfied until those of the creditors holding certain senior debts have been fully satisfied? A: mortgage bonds B: unsecured notes C: subordinated debentures 3. Using the expectations theory of term structure, a negatively sloped yield curve indicates that investors expect: A: falling long-term interest rates B: rising long-term interest rates C: falling short-term interest rates
describe and compare alternative ways to estimate the probability of company defaulting on its debt obligations. Explain the difference between real-world and risk-neutral estimates
Hi, can I have some help with this question? Thank you
Which one of the following provides a spontaneous source of financing for a firm ? A) Account payable B) Mortgage bonds C) Accounts receivable D) Debentures
Which of the below statements is false for equity? A. Limited liability B.Residual claim on firm value C.Payouts to equity holders must be made before interest payments D.Voting Rights
Investment banking refers to O A. Activities related to underwriting and distributing new issues of equity and debt securities (IPOS and Seasoned Offerings) B. Turning deposits into loans Oc. Opening checking accounts for individuals O D. Selling certificates of deposits (CDs)