CONNECT CODE F/FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781260685978
Author: PHILLIPS
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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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:…
Using Ratios to Determine Account Balance.We are givem the following information for Cathy Corporation
Sales(credit) . 3,000,000
Cash 150,000
Inventory 850,000
Current liabilities 700,000
Asset turnover 1.25 times
Current ratio 2.50 times
Debt-to assets ratio 40%
Receivable turnover 6 times
Current assets are composed of cash, marketable securities, accounts receivable and inventory.
a.Calculate the amount receivable
b.Calculate the marketable securities
c.Calculate the fixed assets
d.Calculate the long term debt
Chapter 10 Solutions
CONNECT CODE F/FINANCIAL ACCOUNTING
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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