Current Ratio : A part of liquidity ratios , current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis. Debt Ratio: Total assets and the total liabilities are used to construct this ratio. Debt ratio reflects the finance strategy of the company. It is used to evaluate company’s ability to pay its debts. Higher debt ratio implies the higher financial risk. Earnings per Share: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business. 1. To Compute: Current ratio, debt ratio and earnings per share of M Company.

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Answer 1

Question

Chapter 17, Problem P17.33BPGB

To determine

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis.

Debt Ratio: Total assets and the total liabilities are used to construct this ratio. Debt ratio reflects the finance strategy of the company. It is used to evaluate company’s ability to pay its debts. Higher debt ratio implies the higher financial risk.

Earnings per Share: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.

1.

To Compute: Current ratio, debt ratio and earnings per share of M Company.

To determine

2.

a.

To Evaluate: The effect of merchandise inventory purchase of $42,000 on account on current ratio, debt ratio and earnings per share.

To determine

b.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after borrow $121,000 on a long-term notes payable on current ratio, debt ratio and earnings per share.

To determine

c.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after issued 5,000 shares of common stock, received cash of $103,000.

To determine

d.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after received cash on account $5,000.

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Students have asked these similar questions

Selby Industries has a standard requirement of 4 direct labor hours for each unit produced and pays $12 per hour. During the last month, the company produced 1,200 units of its product and paid a total of $60,480 in direct labor wages. The labor efficiency variance was $720 favorable. What was the direct labor rate variance?

Tyson manufacturing company produces and sells 120,000 units of a single product. Variable costs total $340,000 and fixed costs total $480,000. If each unit is sold for $12, what markup percentage is the company using? Right Answer

The direct labor rate variance is?

Answer 2

Question

Chapter 17, Problem P17.33BPGB

To determine

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis.

Debt Ratio: Total assets and the total liabilities are used to construct this ratio. Debt ratio reflects the finance strategy of the company. It is used to evaluate company’s ability to pay its debts. Higher debt ratio implies the higher financial risk.

Earnings per Share: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.

1.

To Compute: Current ratio, debt ratio and earnings per share of M Company.

To determine

2.

a.

To Evaluate: The effect of merchandise inventory purchase of $42,000 on account on current ratio, debt ratio and earnings per share.

To determine

b.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after borrow $121,000 on a long-term notes payable on current ratio, debt ratio and earnings per share.

To determine

c.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after issued 5,000 shares of common stock, received cash of $103,000.

To determine

d.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after received cash on account $5,000.

Expert Solution & Answer

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Answer 3

Question

Chapter 17, Problem P17.33BPGB

To determine

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis.

Debt Ratio: Total assets and the total liabilities are used to construct this ratio. Debt ratio reflects the finance strategy of the company. It is used to evaluate company’s ability to pay its debts. Higher debt ratio implies the higher financial risk.

Earnings per Share: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.

1.

To Compute: Current ratio, debt ratio and earnings per share of M Company.

To determine

2.

a.

To Evaluate: The effect of merchandise inventory purchase of $42,000 on account on current ratio, debt ratio and earnings per share.

To determine

b.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after borrow $121,000 on a long-term notes payable on current ratio, debt ratio and earnings per share.

To determine

c.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after issued 5,000 shares of common stock, received cash of $103,000.

To determine

d.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after received cash on account $5,000.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 17, Problem P17.33BPGB

To determine

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis.

Debt Ratio: Total assets and the total liabilities are used to construct this ratio. Debt ratio reflects the finance strategy of the company. It is used to evaluate company’s ability to pay its debts. Higher debt ratio implies the higher financial risk.

Earnings per Share: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.

1.

To Compute: Current ratio, debt ratio and earnings per share of M Company.

To determine

2.

a.

To Evaluate: The effect of merchandise inventory purchase of $42,000 on account on current ratio, debt ratio and earnings per share.

To determine

b.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after borrow $121,000 on a long-term notes payable on current ratio, debt ratio and earnings per share.

To determine

c.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after issued 5,000 shares of common stock, received cash of $103,000.

To determine

d.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after received cash on account $5,000.

Expert Solution & Answer

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Answer 5

Chapter 17, Problem P17.33BPGB

To determine

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis.

Debt Ratio: Total assets and the total liabilities are used to construct this ratio. Debt ratio reflects the finance strategy of the company. It is used to evaluate company’s ability to pay its debts. Higher debt ratio implies the higher financial risk.

Earnings per Share: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.

1.

To Compute: Current ratio, debt ratio and earnings per share of M Company.

To determine

2.

a.

To Evaluate: The effect of merchandise inventory purchase of $42,000 on account on current ratio, debt ratio and earnings per share.

To determine

b.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after borrow $121,000 on a long-term notes payable on current ratio, debt ratio and earnings per share.

To determine

c.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after issued 5,000 shares of common stock, received cash of $103,000.

To determine

d.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after received cash on account $5,000.

Answer 6

Chapter 17, Problem P17.33BPGB

To determine

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis.

Debt Ratio: Total assets and the total liabilities are used to construct this ratio. Debt ratio reflects the finance strategy of the company. It is used to evaluate company’s ability to pay its debts. Higher debt ratio implies the higher financial risk.

Earnings per Share: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.

1.

To Compute: Current ratio, debt ratio and earnings per share of M Company.

Answer 7

Chapter 17, Problem P17.33BPGB

To determine

Current Ratio: A part of liquidity ratios, current ratio reflects the ability to oblige the short-term debts of a company. It is calculated based on the current assets and current liabilities; a company has in an accounting period. Current ratio is useful tool for analysis.

Debt Ratio: Total assets and the total liabilities are used to construct this ratio. Debt ratio reflects the finance strategy of the company. It is used to evaluate company’s ability to pay its debts. Higher debt ratio implies the higher financial risk.

Earnings per Share: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.

1.

To Compute: Current ratio, debt ratio and earnings per share of M Company.

Answer 8

To determine

2.

a.

To Evaluate: The effect of merchandise inventory purchase of $42,000 on account on current ratio, debt ratio and earnings per share.

Answer 9

To determine

2.

a.

To Evaluate: The effect of merchandise inventory purchase of $42,000 on account on current ratio, debt ratio and earnings per share.

Answer 10

To determine

b.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after borrow $121,000 on a long-term notes payable on current ratio, debt ratio and earnings per share.

Answer 11

To determine

b.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after borrow $121,000 on a long-term notes payable on current ratio, debt ratio and earnings per share.

Answer 12

To determine

c.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after issued 5,000 shares of common stock, received cash of $103,000.

Answer 13

To determine

c.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after issued 5,000 shares of common stock, received cash of $103,000.

Answer 14

To determine

d.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after received cash on account $5,000.

Answer 15

To determine

d.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after received cash on account $5,000.

Answer 16

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Answer 17

Expert Solution & Answer

Answer 18

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Answer 19

Ch. 17 - Prob. 1QC Ch. 17 - Prob. 2QC Ch. 17 - Prob. 3QC Ch. 17 - Prob. 4QC Ch. 17 - Prob. 5QC Ch. 17 - Prob. 6QC Ch. 17 - Prob. 7QC Ch. 17 - Prob. 8QC Ch. 17 - Prob. 9QC Ch. 17 - Prob. 10QC

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2.

a.

To Evaluate: The effect of merchandise inventory purchase of $42,000 on account on current ratio, debt ratio and earnings per share.

b.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after borrow $121,000 on a long-term notes payable on current ratio, debt ratio and earnings per share.

c.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after issued 5,000 shares of common stock, received cash of $103,000.

d.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after received cash on account $5,000.

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Chapter 17 Solutions

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2. a. To Evaluate: The effect of merchandise inventory purchase of $42,000 on account on current ratio, debt ratio and earnings per share.

b. To Evaluate: The effect on current ratio, debt ratio and earnings per share after borrow $121,000 on a long-term notes payable on current ratio, debt ratio and earnings per share.

c. To Evaluate: The effect on current ratio, debt ratio and earnings per share after issued 5,000 shares of common stock, received cash of $103,000.

d. To Evaluate: The effect on current ratio, debt ratio and earnings per share after received cash on account $5,000.

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Chapter 17 Solutions

2.

a.

To Evaluate: The effect of merchandise inventory purchase of $42,000 on account on current ratio, debt ratio and earnings per share.

b.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after borrow $121,000 on a long-term notes payable on current ratio, debt ratio and earnings per share.

c.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after issued 5,000 shares of common stock, received cash of $103,000.

d.

To Evaluate: The effect on current ratio, debt ratio and earnings per share after received cash on account $5,000.