Connect 2-Semester Access Card for Fundamental Accounting Principles
Connect 2-Semester Access Card for Fundamental Accounting Principles
22nd Edition
ISBN: 9780077632755
Author: John Wild
Publisher: McGraw-Hill Education
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Chapter 17, Problem 4DQ
To determine

Concept Introduction:

Current ratio: The current ratio can be defined as the ratio of total current assets to total current liabilities. A current ratio is a measures that a company’s ability to pay short-term and long-term obligations.

A current ratio is calculated as under –

Current ratio =Total current assetsTotal current liabilities

To discuss:

Three factors that would influence your evaluation as to whether a company’s current ratio is good or bad

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On January 1, 2025, Fisher Company makes the two following acquisitions. 1. 2. Purchases land having a fair market value of $800,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $1,175,468. Purchases equipment by issuing a 4%, 8-year promissory note having a maturity value of $350,000 (Interest payable annually on January 1). The company has to pay 8% interest for funds from its bank. (a) (b) Record the two journal entries that should be recorded by Fisher Company for the two purchases on January 1, 2025. Record the interest at the end of the first year on both notes using the effective-interest method. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal place, e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries…

Chapter 17 Solutions

Connect 2-Semester Access Card for Fundamental Accounting Principles

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Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License