Ratio of liabilities to stockholder's equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the stockholder’s equity . This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations. Ratio of liabilities to stockholders' equity } = Total Liabilities Total Stockholder’s Equity To determine: Total stockholder’s equity at the end of the years 2 and 1 for Company LC.

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Answer 1

Question

Chapter 1, Problem 1.27EX

a)

To determine

Ratio of liabilities to stockholder's equity:

Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the stockholder’s equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Stockholder’s Equity

To determine: Total stockholder’s equity at the end of the years 2 and 1 for Company LC.

b)

To determine

The ratio of liabilities to stockholders' equity of Company LC.

c)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company LC.

d)

To determine

To Compare: The ratio of liabilities to stockholders' equity of Company LC and Company THD.

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Delta's inventory records for February reflect the following details: On February 1, the beginning inventory consisted of 250 units priced at $3.20 each. On February 9, Delta made its first purchase of 350 units at a cost of $3.50 each. A second purchase was made on February 18, consisting of 500 units priced at $3.70 each. By the end of the month, on February 28, Delta sold 700 units at a price of $6.50 per unit. Using the FIFO (First-In, First-Out) cost flow method, what is the cost of goods sold (COGS) for February?

Please explain the solution to this general accounting problem with accurate principles.

Please explain how to solve this financial accounting question with valid financial principles.

Answer 2

Question

Chapter 1, Problem 1.27EX

a)

To determine

Ratio of liabilities to stockholder's equity:

Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the stockholder’s equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Stockholder’s Equity

To determine: Total stockholder’s equity at the end of the years 2 and 1 for Company LC.

b)

To determine

The ratio of liabilities to stockholders' equity of Company LC.

c)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company LC.

d)

To determine

To Compare: The ratio of liabilities to stockholders' equity of Company LC and Company THD.

Expert Solution & Answer

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Answer 3

Question

Chapter 1, Problem 1.27EX

a)

To determine

Ratio of liabilities to stockholder's equity:

Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the stockholder’s equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Stockholder’s Equity

To determine: Total stockholder’s equity at the end of the years 2 and 1 for Company LC.

b)

To determine

The ratio of liabilities to stockholders' equity of Company LC.

c)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company LC.

d)

To determine

To Compare: The ratio of liabilities to stockholders' equity of Company LC and Company THD.

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Answer 4

Question

Chapter 1, Problem 1.27EX

a)

To determine

Ratio of liabilities to stockholder's equity:

Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the stockholder’s equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Stockholder’s Equity

To determine: Total stockholder’s equity at the end of the years 2 and 1 for Company LC.

b)

To determine

The ratio of liabilities to stockholders' equity of Company LC.

c)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company LC.

d)

To determine

To Compare: The ratio of liabilities to stockholders' equity of Company LC and Company THD.

Expert Solution & Answer

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Answer 5

Chapter 1, Problem 1.27EX

a)

To determine

Ratio of liabilities to stockholder's equity:

Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the stockholder’s equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Stockholder’s Equity

To determine: Total stockholder’s equity at the end of the years 2 and 1 for Company LC.

b)

To determine

The ratio of liabilities to stockholders' equity of Company LC.

c)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company LC.

d)

To determine

To Compare: The ratio of liabilities to stockholders' equity of Company LC and Company THD.

Answer 6

Chapter 1, Problem 1.27EX

a)

To determine

Ratio of liabilities to stockholder's equity:

Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the stockholder’s equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Stockholder’s Equity

To determine: Total stockholder’s equity at the end of the years 2 and 1 for Company LC.

Answer 7

Chapter 1, Problem 1.27EX

a)

To determine

Ratio of liabilities to stockholder's equity:

Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the stockholder’s equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Stockholder’s Equity

To determine: Total stockholder’s equity at the end of the years 2 and 1 for Company LC.

Answer 8

b)

To determine

The ratio of liabilities to stockholders' equity of Company LC.

Answer 9

b)

To determine

The ratio of liabilities to stockholders' equity of Company LC.

Answer 10

c)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company LC.

Answer 11

c)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company LC.

Answer 12

d)

To determine

To Compare: The ratio of liabilities to stockholders' equity of Company LC and Company THD.

Answer 13

d)

To determine

To Compare: The ratio of liabilities to stockholders' equity of Company LC and Company THD.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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Solution Summary: The author calculates the total stockholder's equity at the end of the years 2 and 1 for Company LC.

The ratio of liabilities to stockholders' equity of Company LC.

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company LC.

To Compare: The ratio of liabilities to stockholders' equity of Company LC and Company THD.

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Chapter 1 Solutions