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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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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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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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.

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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.

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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

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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.