Chapter 10, Problem 7AP

a)

To determine

Prepare the current liabilities and long-term liabilities sections of MTC’s classified balance sheet as of December 31, 2018.

b)

To determine

Explain briefly the way the information in each of the six numbered paragraphs affected the presentation of the company’s liabilities.

c)

To determine

Compute Company MTC’s (1) the debt ratio and (2) the interest coverage ratio.

d)

To determine

Based on the given information stated in problem, indicate whether this company appears to be an outstanding, medium, or poor long-term credit risk. Conclude with specific reasons.