Horngren's Financial & Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780133866292
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 2, Problem 2.9SE
Calculating debt ratio
Vacuum Magic Carpet Care had the following total assets, liabilities, and equity as of October 31:
| Assets | $ 240,000 |
| Liabilities | 60,000 |
| Equity | 180,000 |
What is Vacuum Magic Carpet Care’s debt ratio as of October 31?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Calculating debt ratio
Aladdin Carpet Care had the following total assets, liabilities, and equity as of October 31:
What is Aladdin Carpet Care’s debt ratio as of October 31?
I need answer of this question
Ratio Analysis
Trevor Corporation had $2,900,000 in total liabilities and $4,300,000 in total assets as of December 31. Trevor calculates that 40% of assets are designated as current,
while $500,000 of Trevor's total liabilities are long-term.
Required:
Calculate Trevor's debt to assets ratio and its long-term debt to equity ratio. Round your answers to two decimal places.
Debt to Total Assets
Long-Term Debt to Total Equity
Chapter 2 Solutions
Horngren's Financial & Managerial Accounting (5th Edition)
Ch. 2 - The detailed record of the changes in a particular...Ch. 2 - Which of the following accounts is a liability? a....Ch. 2 - The left side of an account is used to record...Ch. 2 - Which of the following statements is correct? a....Ch. 2 - Prob. 5QCCh. 2 - Prob. 6QCCh. 2 - Posting a 2,500 purchase of office supplies on...Ch. 2 - Prob. 8QCCh. 2 - Which sequence correctly summarizes the accounting...Ch. 2 - Nathville Laundry reported assets of 800 and...
Ch. 2 - Identify the three categories of the accounting...Ch. 2 - What is the purpose of the chart of accounts?...Ch. 2 - What does a ledger show? Whats the difference...Ch. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - When are credits increases? When are credits...Ch. 2 - Prob. 8RQCh. 2 - What are source documents? Provide examples of...Ch. 2 - Prob. 10RQCh. 2 - Explain the five steps in journalizing and posting...Ch. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - What is the purpose of the trial balance?Ch. 2 - Prob. 15RQCh. 2 - If total debits equal total credits on the trial...Ch. 2 - What is the calculation for the debt ratio?...Ch. 2 - Identifying accounts Consider the following...Ch. 2 - Identifying increases and decreases in accounts...Ch. 2 - Identifying normal balances For each account,...Ch. 2 - Prob. 2.4SECh. 2 - Journalizing transactions Arkansas Sales...Ch. 2 - Prob. 2.6SECh. 2 - Prob. 2.7SECh. 2 - Preparing a trial balance Henderson Floor...Ch. 2 - Calculating debt ratio Vacuum Magic Carpet Care...Ch. 2 - Using accounting vocabulary March the accounting...Ch. 2 - Creating a chart of accounts Raymond Autobody Shop...Ch. 2 - Identifying accounts, increases in accounts, and...Ch. 2 - Identifying increases and decreases in accounts...Ch. 2 - Identifying source documents For each transaction,...Ch. 2 - Analyzing and journalizing transactions As the...Ch. 2 - Use the following information to answer Exercises...Ch. 2 - Use the following information to answer Exercises...Ch. 2 - Use the following information to answer Exercises...Ch. 2 - Use the following information to answer Exercises...Ch. 2 - Analyzing transactions from T-accounts The first...Ch. 2 - Journalizing transactions from T-accounts In...Ch. 2 - Preparing a trial balance The accounts of Aker...Ch. 2 - Preparing a trial balance from T-accounts The...Ch. 2 - Journalizing transactions, posting journal entries...Ch. 2 - Prob. 2.25ECh. 2 - Prob. 2.26ECh. 2 - Correcting errors in a trial balance The following...Ch. 2 - Prob. 2.28ECh. 2 - Problems Group A Journalizing transactions,...Ch. 2 - Journalizing transactions, posting journal entries...Ch. 2 - Journalizing transactions, posting journal entries...Ch. 2 - Journalizing transactions, posting journal entries...Ch. 2 - Correcting errors in a trial balance The trial...Ch. 2 - Preparing financial statements from the trial...Ch. 2 - Journalizing transactions, posting journal entries...Ch. 2 - Journalizing transactions, posting journal entries...Ch. 2 - Journalizing transactions, posting journal entries...Ch. 2 - Prob. 2.38BPCh. 2 - Prob. 2.39BPCh. 2 - Prob. 2.40BPCh. 2 - Journalizing transactions, posting to T-accounts,...Ch. 2 - Journalizing transactions, posting to T-accounts,...Ch. 2 - Your friend, Dean McChesney, requested that you...Ch. 2 - Prob. 2.1CTEICh. 2 - Roy Akins was the accounting manager at Zelco, a...Ch. 2 - Prob. 2.1CTFSCCh. 2 - In 35 words or fewer, explain the difference...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Ernst Companys balance sheet shows total liabilities of 32,500,000, total stockholders equity of 8,125,000, and total assets of 40,625,000. Required: Note: Round answers to two decimal places. 1. Calculate the debt ratio. 2. Calculate the debt-to-equity ratio.arrow_forwardCalculating the Debt Ratio and the Debt-to-Equity Ratio Ernst Company's balance sheet shows total liabilities of $32,766,300, total stockholders' equity of $8,998,000, and total assets of $41,764,300. Required: 1. Calculate the debt ratio. Round the percentage to two decimal places.fill in the blank 1% 2. Calculate the debt-to-equity ratio. Round to two decimal places.fill in the blank 2arrow_forwardDurable Plastics Company had the following total assets, liabilities, and equity as of December 31. Total Assets Total Liabilities Total Equity $440,000 133,000 307,000 What is the company's debt ratio as of December 31? (Round your percentage answer to two decimal places.) OA. 30.23% OB. 43.32% O C. 100.00% O D. 69.77%arrow_forward
- Consider the following company’s balance sheet and income statement. For this company, calculate the following: Current ratio. Number of days’ sales in receivables. Sales to total assets.arrow_forwardCalculating Ratios and Estimating Credit Rating The following data are from Kellogg's 10-K report dated December 29, 2018 ($ millions). Revenue Interest expense Tax expense Amortization expense Depreciation expense $13,547 Earnings from continuing operations $1,344 Capital expenditures (CAPEX) 578 287 181 Total debt 8,893 23 Average assets 17,066 493 a. Use the data above to calculate the following ratios: EBITA/Average assets, EBITA Margin, EBITA/ Interest expense, Debt/EBITDA, CAPEX/Depreciation Expense. Definitions for these ratios are in Exhibit 7.4. b. Refer to Exhibit 7.4 and the ratios you calculated in part a. Estimate the credit rating that Moody's might assign to Kellogg. Round answers to one decimal place (percentage ex: 0.2345 = 23.5%) Ratio Moody's rating EBITA/Avg. assets EBITA margin EBITA/Int. expense Debt/EBITDA CAPEX/Dep. expense Please answer all parts of the question. 0% 0% 0 0 0 ◆ ◆arrow_forwardKlynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of 75,000,000, and total assets of 169,000,000. Required: Note: Round answers to two decimal places. 1. Calculate the debt ratio. 2. Calculate the debt-to-equity ratio.arrow_forward
- FINANCIAL RATIOS Based on the financial statements for Jackson Enterprises (income statement, statement of owners equity, and balance sheet) shown on pages 596597, prepare the following financial ratios. All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was 21,600. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and average number of days required to collect receivables 6. Inventory turnover and average number of days required to sell inventoryarrow_forwardFINANCIAL RATIOS Based on the financial statements, shown on pages 605606, for McDonald Carpeting Co. (income statement, statement of owners equity, and balance sheet), prepare the following financial ratios. All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was 6,800. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and the average number of days required to collect receivables 6. Inventory turnover and the average number of days required to sell inventoryarrow_forwardFINANCIAL RATIOS Based on the financial statements, shown on pages 603604, for McDonald Carpeting Co. (income statement, statement of owners equity, and balance sheet), prepare the following financial ratios. All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was 6,800. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and average number of days required to collect receivables 6. Inventory turnover and average number of days required to sell inventoryarrow_forward
- FINANCIAL RATIOS Based on the financial statements foe Jackson Enterprises (income statement, statement of owners equity, and balance sheet) shown on pages 598599, prepare the following financial ratios. All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was 21,600. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and average number of days required to collect receivables 6. Inventory turnover and average number of days required to sell inventoryarrow_forwardConsider the following company’s balance sheet and income statement. Number of days in inventory. Debt-to-asset ratio. Cash-flow-to-debt ratio.arrow_forwardGiven the following information, calculate the debt ratio percentage: Liabilities $24,000 Liquid assets $4,400 Monthly credit payments $300 Monthly savings $260 Net worth $72,000 Current liabilities $1,100 Take-home pay $1,800 Gross income $3,000 Monthly expenses $1,540 a) 33.3 b) 4 c) 2.86 O d) 16.67 O e) 8.67arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
College Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
College Accounting, Chapters 1-27 (New in Account...
Accounting
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:Cengage Learning
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License