Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the adjusted debt to assets ratio?
Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the adjusted debt to assets ratio?
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 1PEA
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Question
Consider the following worksheet with information extracted from a financial statement:
2020 Assets Liabilities Equity
Reported (P) 500 000 100 000 400 000
You believe the firm has omitted a provision pertaining to a lawsuit. You assess this provision is valued at P30 000 and that it will be paid in the next six months. Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the adjusted debt to assets ratio?
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