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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A company had expenses other than the cost of goods sold of $280,000. Determine sales and gross profit given that the cost of goods sold was $120,000 and net income was $180,000. A. Sales: $580,000; Gross Profit: $60,000 B. Sales: $580,000; Gross Profit: $460,000 C. Sales: $460,000; Gross Profit: $580,000 D. Sales: $400,000; Gross Profit: $180,000 E. Sales: $400,000; Gross Profit: $60,000

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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.

Expert Solution & Answer

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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