Ratio of liabilities to stockholders' equity : Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner'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 Owner's Equity To Compute: The ratio of liabilities to stockholders' equity of Company PJ and Company YB.

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Answer 1

Question

Chapter 1, Problem 4ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner'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 Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company PJ and Company YB.

b)

To determine

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

c)

To determine

A more risky company among Company PJ and Company YB.

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Brun Company produces its product through two processing departments: Mixing and Baking. Information for the Mixing department follows. Direct Materials Conversion Unit Percent Complete Percent Complete Beginning work in process inventory 7.500 Units started this period 104,500 Units completed and transferred out 100.000 Ending work in process inventory 12.000 100% 25% Beginning work in process inventory Direct materials Conversion $6.800 14.500 $21.300 Costs added this period Drect materials 116,400 Conversion Total costs to account for 1.067,000 1.183.400 $1.204.700 Required 1. Prepare the Mixing department's production cost report for November using the weighted average method Check (1) C$1.000 2. Prepare the November 30 journal entry to transfer the cost of completed units from Mixing to Baking

Answer 2

Question

Chapter 1, Problem 4ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner'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 Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company PJ and Company YB.

b)

To determine

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

c)

To determine

A more risky company among Company PJ and Company YB.

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Answer 3

Question

Chapter 1, Problem 4ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner'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 Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company PJ and Company YB.

b)

To determine

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

c)

To determine

A more risky company among Company PJ and Company YB.

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Answer 4

Question

Chapter 1, Problem 4ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner'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 Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company PJ and Company YB.

b)

To determine

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

c)

To determine

A more risky company among Company PJ and Company YB.

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Answer 5

Chapter 1, Problem 4ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner'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 Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company PJ and Company YB.

b)

To determine

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

c)

To determine

A more risky company among Company PJ and Company YB.

Answer 6

Chapter 1, Problem 4ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner'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 Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company PJ and Company YB.

Answer 7

Chapter 1, Problem 4ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner'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 Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company PJ and Company YB.

Answer 8

b)

To determine

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

Answer 9

b)

To determine

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

Answer 10

c)

To determine

A more risky company among Company PJ and Company YB.

Answer 11

c)

To determine

A more risky company among Company PJ and Company YB.

Answer 12

Expert Solution & Answer

Answer 13

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Answer 14

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Answer 15

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Solution Summary: The author explains the ratio of liabilities to stockholders' equity, which measures the claims of creditors over owners in financing the assets.

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

A more risky company among Company PJ and Company YB.

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