GEN COMBO LL FUNDAMENTALS OF FINANCIAL ACCOUNTING; CONNECT ACCESS CARD
6th Edition
ISBN: 9781260260083
Author: Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 10, Problem 14ME
Analyzing the Impact of Transactions on the Debt-to-Assets Ratio
BSO, Inc., has assets of $600,000 and liabilities of $450,000, resulting in a debt-to-assets ratio of 0.75. For each of the following transactions, determine whether the debt-to-assets ratio will increase, decrease, or remain the same. Each item is independent.
- a. Purchased $20,000 of new inventory on credit.
- b. Paid accounts payable in the amount of $50,000.
- c. Recorded accrued salaries in the amount of $100,000.
- d. Borrowed $250,000 from a local bank, to be repaid in 90 days.
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BSO, Inc., has assets of $600,000 and liabilities of $450,000, resulting in a debt-to-assets ratioof 0.75. For each of the following transactions, determine whether the debt-to-assets ratio willincrease, decrease, or remain the same. Each item is independent.a. Purchased $20,000 of new inventory on credit.b. Paid accounts payable in the amount of $50,000.c. Recorded accrued salaries in the amount of $100,000.d. Borrowed $250,000 from a local bank, to be repaid in 90 days.
Current Ratio, Quick Ratio, and Times-Interest-Earned Ratio
The following data is from the current accounting records of Florence Company:
Cash
$336
Accounts receivable (net of allowance of $112) 560
Inventory
420
224
305
476
Other current assets
Accounts payable
Other current liabilities
The president of the company is concerned that the company is in violation of a debt covenant that requires the company to maintain a minimum current ratio of 2.0. He believes the best way to rectify this is to reverse a bad debt write-off in the amount of $28 that the company just recorded. He argues that the write-off was done too
early and that the collections department should be given more time to collect the outstanding receivables. The CFO argues that this will have no effect on the current ratio, so a better idea is to use $28 of cash to pay accounts payable early. Florence Company uses the allowance method to account for bad debts.
a. Calculate the current ratio under the following scenarios:…
need the calculation for debt to assets ratio, debt equity ratio, long-term debt to equity and times interest earned ratio.
CURRENT ASSETS
Cash and cash equivalents
$ 5,910
$ 5,238
Marketable securities
406
503
Accounts receivable
10,888
9,645
Less: Allowance for credit losses
(138)
(93)
Accounts receivable, net
10,750
9,552
Assets held for sale
1,197
0
Other current assets
1,953
1,810
Total Current Assets
20,216
17,103
Property, Plant and Equipment, Net
32,254
30,482
Operating Lease, Right-of-Use Asset
3,073
2,856
Goodwill
3,367
3,813
Intangible Assets, Net
2,274
2,167
Investments and Restricted Cash
25
24
Deferred Income Tax Assets
527
330
Other Non-Current Assets
672
1,082
Total Assets
62,408
57,857
Current Liabilities:
Current maturities of long-term debt, commercial paper and finance leases
2,623
3,420
Operating Lease, Liability, Current
560
538
Accounts payable
6,455
5,555
Accrued wages and withholdings
3,569
2,552…
Chapter 10 Solutions
GEN COMBO LL FUNDAMENTALS OF FINANCIAL ACCOUNTING; CONNECT ACCESS CARD
Ch. 10 - Prob. 1QCh. 10 - Prob. 2QCh. 10 - What three factors influence the dollar amount...Ch. 10 - Prob. 4QCh. 10 - Why is Deferred Revenue considered a liability?Ch. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - If a company has a long-term loan that has only...Ch. 10 - What are the reasons that some bonds are issued at...Ch. 10 - Prob. 10Q
Ch. 10 - Will the stated interest rate be higher than the...Ch. 10 - What is the carrying value of a bond payable?Ch. 10 - What is the difference between a secured bond and...Ch. 10 - Prob. 14QCh. 10 - Prob. 15QCh. 10 - Prob. 16QCh. 10 - Prob. 17QCh. 10 - (Supplement D) Over the period to maturity, why...Ch. 10 - Which of the following best describes Accrued...Ch. 10 - Prob. 2MCCh. 10 - Prob. 3MCCh. 10 - Prob. 4MCCh. 10 - Which of the following does not impact the...Ch. 10 - Which of the following is false when a bond is...Ch. 10 - To determine if a bond will be issued at a...Ch. 10 - A bond is issued at a price of 103 and retired...Ch. 10 - In a recent year. Land O Lakes, Inc., reported (in...Ch. 10 - Prob. 10MCCh. 10 - Recording Unearned Revenues A local theater...Ch. 10 - Prob. 2MECh. 10 - Prob. 3MECh. 10 - Reporting Payroll Tax Liabilities Refer to M10-3....Ch. 10 - Reporting Current and Noncurrent Portions of...Ch. 10 - Recording a Note Payable Greener Pastures...Ch. 10 - Reporting Interest and Long-Term Debt, Including...Ch. 10 - On February 6, 2017, the NYSE bond directory...Ch. 10 - E-Tech Initiatives Limited plans to issue...Ch. 10 - Repeat M10-9 assuming the bonds are issued at...Ch. 10 - Recording Bonds Issued at Face Value Schlitterbahn...Ch. 10 - Prob. 12MECh. 10 - Computing the Debt-to-Assets Ratio and the Times...Ch. 10 - Analyzing the Impact of Transactions on the...Ch. 10 - Prob. 15MECh. 10 - Prob. 16MECh. 10 - Prob. 17MECh. 10 - Prob. 18MECh. 10 - Prob. 19MECh. 10 - Prob. 20MECh. 10 - Prob. 21MECh. 10 - Determining Financial Statement Effects of...Ch. 10 - Recording a Note Payable through Its Time to...Ch. 10 - Recording Payroll Costs McLoyd Company completed...Ch. 10 - Recording Payroll Costs with and without...Ch. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Preparing Journal Entries to Record Issuance of...Ch. 10 - Preparing Journal Entries to Record Issuance of...Ch. 10 - Prob. 9ECh. 10 - Calculating and Interpreting the Debt-to-Assets...Ch. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 14ECh. 10 - (Supplement 10B) Recording the Effects of a...Ch. 10 - Prob. 16ECh. 10 - Prob. 17ECh. 10 - Determining Financial Effects of Transactions...Ch. 10 - Recording and Reporting Current Liabilities with...Ch. 10 - Recording and Reporting Current Liabilities...Ch. 10 - Comparing Bonds Issued at Par, Discount, and...Ch. 10 - Determining Financial Statement Reporting of...Ch. 10 - Prob. 6CPCh. 10 - Prob. 7CPCh. 10 - Prob. 8CPCh. 10 - Prob. 9CPCh. 10 - Prob. 10CPCh. 10 - Determining Financial Effects of Transactions...Ch. 10 - Recording and Reporting Current Liabilities with...Ch. 10 - Recording and Reporting Current Liabilities...Ch. 10 - Comparing Bonds Issued at Par, Discount, and...Ch. 10 - Prob. 5PACh. 10 - Prob. 6PACh. 10 - Prob. 7PACh. 10 - Prob. 8PACh. 10 - Prob. 9PACh. 10 - Prob. 1PBCh. 10 - Recording and Reporting Current Liabilities with...Ch. 10 - Prob. 3PBCh. 10 - Prob. 4PBCh. 10 - Recording and Explaining the Early Retirement of...Ch. 10 - Prob. 6PBCh. 10 - Prob. 7PBCh. 10 - Prob. 8PBCh. 10 - Zarina Corp. signed a new installment note on...Ch. 10 - Prob. 1COPCh. 10 - Prob. 1SDCCh. 10 - Prob. 2SDCCh. 10 - Prob. 4SDCCh. 10 - Prob. 5SDCCh. 10 - Prob. 6SDCCh. 10 - Prob. 7SDCCh. 10 - Prob. 8SDCCh. 10 - (Supplement 10C) Preparing a Bond Amortization...Ch. 10 - Nicole thinks that her business, Nicole’s Getaway...
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