Chapter 5, Problem 3UJ

To determine

Case 1:

(a)

To determine whether the investors have to be informed of the increase in price of raw materials as in item 1.

To determine

(b)

To determine the way item 2 has to be presented in the financial statements.

To determine

Case 2:

(a)

To organize: To organize the accounts in general order to be represented in classified balance sheet.

To determine

(b)

To determine the affected accounts in the balance sheet.

To determine

Case 3:

(a)

To compute: To compute the ratios of D Company.

To determine

(b)

(1)

Evaluate the loans of D Company due in 1 year: The liquidity of D Company is too good that it will be able to pay a loan up to $25,575 billion due in a year.

(2)

Evaluate the loans of D Company due in 5 years: The repayment of loans of D Company in 5 years includes additional contractual obligations of $13,119 and $8,211.

To determine

Case 4:

(a)

Particulars	Current year ($)	Prior year ($)
Current assets	31,327	24,625
Total assets	54,505	40,159
Current liabilities	28,089	22,980
Total liabilities	43,764	30,413
(1) Cash provided by operations	6,842	5,475
(2) Capital expenditures	4,893	3,444
(3) Dividends paid	0	0
Net loss/Net income	(241)	274
Sales	88,988	74,452

To determine

(b)

To discuss: To discuss the potential implications of change in cash provided by the operations of the company.