Answer:
a) Aug. 10
Dr Allowance for Doubtful Accounts $800
Cr Accounts Receivable—Sue King $800
Sept. 12
Dr Allowance for Doubtful Accounts $3,700
Cr Account Receiveble- Tom young $3,700
Oct. 10
Dr Accounts Receivable— Sue King $800
Cr Allowance for Doubtful Accounts $800
Dr Cash $500
Cr Accounts Receivable— Sue King $500
(To record collection on account)
Nov. 15 Cash $300
Cr Accounts Receivable— Sue King $300
(b) Dec. 31
Dr Bad Debt Expense $30,000
Cr Allowance for Doubtful Accounts $30,000
(c) $38,900
Explanation:
a) Preparation of the journal entry
Aug. 10
Dr Allowance for Doubtful Accounts $800
Cr Accounts Receivable—Sue King $800
(To write off Sue King account)
Sept. 12
Dr Allowance for Doubtful Accounts $3,700
Cr Account Receiveble- Tom young $3,700
(To write off Tom Young account)
Oct. 10
Dr Accounts Receivable— Sue King $800
Cr Allowance for Doubtful Accounts $800
(To reinstate Sue King account previously written off)
Dr Cash $500
Cr Accounts Receivable— Sue King $500
(To record collection on account)
Nov. 15 Cash $300
Cr Accounts Receivable— Sue King $300
(To record collection on account)
(b) Preparation of the adjusting journal entry to record the bad debt provision for the year ended December 31, 2015.
Dec. 31
Dr Bad Debt Expense $30,000
($500,000 ×6%)
Cr Allowance for Doubtful Accounts $30,000
(To record estimate of uncollectible accounts)
(c) Calculation to determine the balance of Allowance for Doubtful Accounts at December 31, 2015
Balance of Allowance for Doubtful Accounts at December 31, 2015= ($5,200 – $800 – $3,700 + $800 + $30,000)
Balance of Allowance for Doubtful Accounts at December 31, 2015=$38,900
Therefore the balance of Allowance for Doubtful Accounts at December 31, 2015 is $38,900
Match the definitions that follow with the term it defines.
a. Demand-based concept
b. Competition-based concept
c. Product cost concept
d. Target costing
e. Production bottleneck
1. Constraint
2. Combines market-based pricing with a cost-reduction emphasis
3. Only includes the costs of manufacturing in product cost per unit
4. Sets the price according to competitors
5. Sets the price according to demand
Answer:
1)e. Production bottleneck
2)d. Target costing
3)c. Product cost concept
4)b. Competition-based concept
5)a. Demand-based concept
Explanation:
1.) Constraint ( Production bottleneck)
A bottleneck as regards production can be explained as point of congestion that is reach in a production system, for instance in
an assembly line which takes place
as a result of arrival of workloads so quickly for the handling of production process.
2. Combines market-based pricing with
a cost-reduction emphasis(Target costing)
Target costing can be regarded as approach used in determining of life-cycle cost of product that is required to be sufficient to develop specified functionality as well as quality, making sure desired profit is ensured.
3. Only includes the costs of manufacturing in product cost per unit
(Product cost concept)
Product cost can be regarded as costs that is been incurred during creation of a product. Some of these costs are
factory overhead, direct labor as well as direct materials, and consumable production supplies.
4. Sets the price according to competitors(Competition-based concept)
Competition based pricing can be regarded as Concept that is been used in setting one's prices in relation to the prices of one's competitors.
5. Sets the price according to demand
(Demand-based concept)
Demand Based Pricing can be regarded as pricing method which is focus on customer's demand as well as perceived value of the product.
Crane Enterprises reported cost of goods sold for 2020 of $1,290,700 and retained earnings of $4,708,100 at December 31, 2020. Crane later discovered that its ending inventories at December 31, 2019 and 2020, were overstated by $116,750 and $32,910, respectively. Determine the corrected amounts for 2020 cost of goods sold and December 31, 2020, retained earnings.
Answer:
Adjusted Cost of Goods sold = $1,206,860Adjusted Retained Earnings = $4,675,190Explanation:
An overstated opening inventory would overstate Cost of Goods sold. The overstatement should therefore be removed from the Cost of goods sold.
An overstated closing inventory would understate Cost of Goods sold. The overstatement should therefore be added to the Cost of Goods sold.
Adjusted Cost of Goods sold 2020 = Cost of Goods sold + 2020 ending inventory - 2019 opening inventory
= 1,290,700 + 32,910 - 116,750
= $1,206,860
Adjusted Retained earnings
The retained earnings would have to be adjusted for the overstatement of the current inventory by $32,910 because this understated Cost of Goods sold.
= Retained earnings - Overstatement of inventory
= 4,708,100 - 32,910
= $4,675,190
The following information relates to the manufacturing operations of the Abbra Publishing Company for the year: Beginning Ending Raw materials inventory $ 547,000 $ 610,000 The raw materials used in manufacturing during the year totaled $1,018,000. Raw materials purchased during the year amount to: Multiple Choice
Answer:
the Raw materials purchased during the year is $1,081,000
Explanation:
the computation of the Raw materials purchased during the year is shown below;
Material used in production $1,018,000.00
Add: Ending Raw Material $610,000.00
Less: Beginning Rawmaterial $547,000.00
Purchase $1,081,000.00
Hence, the Raw materials purchased during the year is $1,081,000
Because poor people are likely to have adequate healthcare, guaranteeing everyone in society the best healthcare would likely equality. Paying laid-off workers unemployment benefits until they find a new job will likely efficiency because this would their effort searching for a job. Which of the following provides an explanation for your answers regarding efficiency?
a. People will work more hours than is optimal.
b. There will likely be insufficient job openings.
c. Too many workers will want to become medical doctors.
d. People may over consume healthcare and reduce their effort when searching for a job
Answer:
1. Because poor people are less likely to have adequate healthcare, guaranteeing everyone in society the best healthcare would likely increase equality.
2. Paying laid-off workers unemployment benefits until they find a new job will likely increase equality and decrease efficiency.
3. d. People may over consume healthcare and reduce their effort when searching for a job
Even though guaranteeing the poor adequate healthcare will work to increase equality, it will lead to a situation where healthcare might be overconsumed as too many people will be going to seek medical services because they can now afford it.
If people get unemployment benefits, their immediate needs will be taken care of and they will probably see less of a need to go out and search for a job as a result.
Austen, the night shift manager of a 24-hour convenience store, would regularly drive his car to the back door, unlock it, and load in a couple of cases of beer, every night. These cases of beer were marked down for no apparent reason, and Austen paid the reduced price. Is Austen setting a good example for his employees
Answer:
bro
Explanation:
A U.S. firm must make a payment of 1 million yen to a Japanese firm that has sold the U.S. firm sets of Japanese baseball-player trading cards. The U.S. firm begins with a dollar checking account. Explain in detail how this payment would be made, including the use of the spot foreign exchange market and banks in both countries.
Answer and Explanation:
The US firm uses its dollar checking account to purchase 1 million yen from its bank(exchanges dollar with yen) and then requests the bank send the 1 million yen to the Japanese firm. The bank sends this one million yen to the Japanese firm through its correspondent bank in Japan or it's branch in Japan(if it has one).
Hurdzan, Inc., has a 30-day average collection period and wants to maintain a minimum cash balance of $20 million, which is what the company currently has on hand. The company currently has a receivables balance of $196 million and has developed the following sales and cash disbursement budgets (in millions):
Q1 Q2 Q3 Q4
Sales $441 $513 $594 $558
Total cash disbursement 368 465 720 456
Required:
Wrtie down cash budget for the company.
Answer:
Attached below
Explanation:
Receivables balance = $196 million
Minimum cash balance = $20 million
Given data :
Q1 Q2 Q3 Q4
Sales $441 $513 $594 $558
Total cash disbursement 368 465 720 456
attached below is the cash budget for the company as required
How do managers handle 2 challenges of each of the 8ms of management to effectively and efficiently steer their organization in a globally competitive environment and thus achieve the organizational goals
Answer:
16
Explanation:
i think 16 im not sure though. hope i helped:)
Donna Clark has $15,000 that she can deposit into a savings account for five years. Bank A compounds interest annually, Bank B twice a year, and Bank C quarterly. Each bank has a stated interest rate of 5 percent. What account balance would Donna have at the end of the fifth year if she left all the interest paid on the deposit in each bank
Answer:
$19,144.22
$19,201.27
$19,230.56
Explanation:
The formula for calculating future value:
FV = P (1 + r) n
FV = Future value
P = Present value
R = interest rate
N = number of years
Bank A = 15,000(1.05)^5 = $19,144.22
Bank B = 15,000(1.05/2)^10 = $19,201.27
Bank C = 15,000(1.05/4)^20 = $19,230.56
The Bert Corp. and Ernie, Inc., have both announced IPOs. You place an order for 1,150 shares of each IPO. One of the IPOs is underpriced by $18.00 and the other is overpriced by $6.50. You will receive all of the shares you ordered of the overpriced IPO, but only one-half of the shares you ordered of the underpriced IPO. What profit do you expect?
a. $31,875.00.
b. $11,562.50.
c. $14,375.00.
d. $7,552.00.
e. $2,812.50.
Answer:
The Bert Corp. and Ernie, Inc.
The profit expected is:
= $2,875.
Explanation:
a) Data and Calculations:
The Bert Corp. Ernie, Inc.
IPO order placed 1,150 shares 1,150 shares
Underpriced by $18.00
Overpriced by $6.50
Profited expected $10,350 -$7,475
Net profit = $2,875 ($10,350 - $7,475)
b) The profit expected is generated from the underpriced stock. This profit is reduced by the increased cost incurred on the over-priced stock. Therefore, the net profit is the difference between the profit and the additional cost incurred.
If Stephenson wishes to maximize its total market value, would you recommend that it issue debt or equity to finance the land purchase. Explain.
Answer:
The answer is issue debt finance
Explanation:
Should Stephenson wishes to maximize the total market value he should issue debt to finance the land purchase.
Why? - Because the interest payments of debt are tax deductible, A capital structure that has a debt will shrink the company’s taxable income, and will form a tax shield that will ultimately increase the total value of the company.
A company is planning to purchase a machine that will cost $57,000 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine?
Sales $138,000
Costs:
Manufacturing $68,000
Depreciation on machine 9,500
Selling and administrative expenses 46,000 (123,500)
Income before taxes $14,500
Income tax (35%) 5,075
Net income $9,425
a. 6.00 years.
b. 1.99 year.
c. 6.05 years.
d. 12.10 years.
e. 3.01 years.
Answer:
e. 3.01 years
Explanation:
Cost of Asset = $57,000
Net annual cash Inflow = Net Income after Tax + Depreciation
Net annual cash Inflow = $9,425 + $9,500
Net annual cash Inflow = $18,925
Payback Period = Cost of Asset (Investment) / Net annual cash Inflow
Payback Period = $57,000 / $18,925
Payback Period = 3.01188904
Payback Period = 3.01 years
A 12-month insurance policy was purchased on Dec. 1 for $4,800 and the Prepaid insurance account was initially increased for the payment. The required adjusting journal entry on December 31 includes a:_________
a. credit to Prepaid insurance for $400.
b. debit to Insurance expense for $400.
c. credit to Insurance expense for $400.
d. debit to Prepaid insurance for $400.
e. debit to Insurance expense for $4,800.
Answer: a. credit to Prepaid insurance for $400.
b. debit to Insurance expense for $400
Explanation:
The required adjusting journal entry on December 31 will be:
Debit Insurance expense = ($4800 *1/12) = $400
Credit Prepaid Insurance = $400
(To record insurance expired for 1 month for December)
Therefore, the correct options are A and B.
what is cost variance
Answer:
Cost variance is the difference between the actual cost incurred and the planned/budgeted cost at a given time on a project.
Explanation:
Which of the following organizations currently is responsible for establishing and improving standards of financial accounting and reporting for the guidance and education of the public, which includes issuers, auditors, and users of financial information?
a. The Accounting Principles Board.
b. The Committee on Accounting Procedure.
c. The Financial Accounting Standards Board
d. All of the answer choices are correct.
Answer:
C)Financial Accounting Standards Board (FASB)
Explanation:
The Financial Accounting Standards Board can be regarded as a private as well as a non-profit organization standard-setting body that is been set up primarily for establishment as well as improvement of Generally Accepted Accounting Principles in the interest of the public, it base in United States. It is set up carry out purposes such as financial accounting as well as reporting of standards for both public and private companies. It was established in year 1973. It should be noted that Financial Accounting Standards Board is a kind of organizations that is currently
responsible for establishing and improving standards of financial accounting and reporting for the guidance and education of the public, which includes issuers, auditors, and users of financial information.
Due to an error in computing depreciation expense, Prewitt Corporation overstated accumulated depreciation by $11 million as of December 31, 2021. Prewitt has a tax rate of 30%. Prewitt's retained earnings as of December 31, 2021, would be:_________ (Round million answer to 2 decimal places.)
A. overstated by $6 million.B. understated by $14 million.C. understated by $6 million.D. overstated by $14 million.
Answer:
Understated by 7.7 Million
Explanation:
Calculation to determine Prewitt's retained earnings as of December 31, 2021, would be:
Accumulated depreciation $11,000,000
Less Deferred tax liability ($3,300,000)
(30%*$11,000,000)
Retained earnings $7,700,000 Understated
Therefore Prewitt's retained earnings as of December 31, 2021, would be:Understated by 7.7 Million
Green Melon Electronics Company's management plans to finance its operations with bank loans that will be repaid as soon as cash is available. The company's management expects that it will take 60 days to manufacture and sell its products and 50 days to receive payment from its customers. Green Melon's CFO has told the rest of the management team that they should expect the length of the bank loans to be approximately 110 days.
Which of the following responses to the CFO's statement is most accurate?
a. The CFO is not taking into account the amount of time the company has to pay its suppliers. Generally, there is a certain length of time between the purchase of materials and labor and the payment of cash for them. The CFO can reduce the estimated length of the bank loan by this amount of time.
b. The CFO's approximation of the length of the bank loans should be accurate, because it will take 110 days for the company to manufacture, sell, and collect cash for its goods. All these things must occur for the company to be able to repay its loans from the bank.
Setting and implementing a credit policy is important for three main reasons:
1. It has a major effect on sales, it influences the amount of funds tied up in receivables, and it affects bad debt losses.
2. It has a minor effect on sales, it influences the amount of funds tied up in receivables, and it affects bad debt losses.
Answer: a. The CFO is not taking into account the amount of time the company has to pay its suppliers. Generally, there is a certain length of time between the purchase of materials and labor and the payment of cash for them. The CFO can reduce the estimated length of the bank loan by this amount of time.
1. It has a major effect on sales, it influences the amount of funds tied up in receivables, and it affects bad debt losses.
Explanation:
A. Since the company's management expects that it will take 60 days to manufacture and sell its products and 50 days to receive payment from its customers, while Green Melon's CFO informed the rest of the management team that they should expect the length of the bank loans to be approximately 110 days, then it can be inferred that the CFO is not taking into account the amount of time the company has to pay its suppliers.
2. Setting and implementing a credit policy is important because it has a major effect on sales, nfluences the amount of funds tied up in receivables, and it also affects bad debt losses.
Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $35 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally: Unit Per 20,000 Units Per YearDirect materials $17 340,000 Direct labor 11 220,000Variable manufacturing overhead 3 60,000Fixed manufacturing overhead, traceable 3 60,000Fixed manufacturing overhead, allocated 6 120,000 Total cost $40 800,000Required:1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier?2. Should the outside supplier’s offer be accepted?3. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $200,000 per year. Given this new assumption, what would be financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier?4. Given the new assumption in requirement 3, should the outside supplier’s offer be accepted?
Answer:
Troy Engines, Limited
1. The financial advantage of buying 20,000 carburetors from the outside supplier is $100,000.
2. The outside supplier's offer should be accepted.
3. The financial advantage of buying 20,000 carburetors from the outside supplier would be $300,000.
4. The outside supplier's offer should be accepted.
Explanation:
a) Data and Calculations:
Outside supplier's selling price = $35 per unit
Total cost of buying from outside supplier = $700,000 ($35 * 200,000)
Segment margin of new product = $200,000
Internal production costs:
Unit Per 20,000 Units Per Year
Direct materials $17 340,000
Direct labor 11 220,000
Variable manufacturing overhead 3 60,000
Fixed manufacturing overhead, traceable 3 60,000
Fixed manufacturing overhead, allocated 6 120,000
Total cost $40 800,000
1. The financial advantage of buying 20,000 carburetors from the outside supplier is $100,000 ($800,000 - $700,000)
2. The outside supplier's offer should be accepted.
3. The financial advantage of buying 20,000 carburetors from the outside supplier would be $300,000 ($800,000 - $500,000)
4. The outside supplier's offer should be accepted.
In the Shaping Department of Jenkins Company the unit materials cost is $3.00 and the unit conversion cost is $1.80. The department transferred out 8,000 units and had 2,000 units in ending work in process 20% complete. If all materials are added at the beginning of the process, the total cost to be assigned to the ending work in process is?
Answer:
$6,720
Explanation:
Calculation to determine what the total cost to be assigned to the ending work in process is
First step
Materials cost=2000 units * 100%
Materials cost=2,000
Conversion costs=2000 units *20%
Conversion costs= 400
Now let determine the ending work in process
Ending work in process=(2000 units *$3.00 per unit)+(400 units *$1.80 per unit)
Ending work in process= $6,000+$720
Ending work in process=$6,720
Therefore the total cost to be assigned to the ending work in process is $6,720
The demand rate for raw material A is normally distributed with an average of 300 pints per day. The standard deviation of daily demand is 15 pints. If the lead time for this material is 4 days, what is the standard deviation of demand during the 4-day lead time
Answer:
the standard deviation of demand during the 4-day lead time is 30
Explanation:
the computation of the standard deviation of demand during the 4-day lead time is given below;
= Sqrt(Lead time) × Std deviation daily demand
= Sqrt(4) × 15
=2 × 15
= 30
Hence, the standard deviation of demand during the 4-day lead time is 30
Interest earnings of 4 percent with a $450 minimum balance; average monthly balance, $600; monthly service charge of $20 for falling below the minimum balance, which occurs five times a year (no interest earned in these months). (Do not round intermediate calculations. Round your answer to 2 decimal places. Input the amount as a positive value.)
Answer:
$86
Explanation:
Missing word "What could be the net annual cost"
Monthly fee = $20
Interest rate = 4% = 0.04
Average monthly balance = $600
Net annual cost = $20*5 - 0.04*$600*7/12
Net annual cost = $100 - $14
Net annual cost = $86
So, the net annual cost of this account is $86.
On December 1, a six-month liability insurance policy was purchased for $900. Analyze the required adjustment as of December 31 using T accounts, and then formally enter this adjustment in the general journal.
Answer:
See below
Explanation:
Prepaid insurance. Insurance expense
————————————- ———————————-
debit. | Credit. Debit. | Credit
|. 150.00. 150. |
enter the debit of 150 under insurance expense in the journal
enter the credit of 150 under prepaid insurance in the journal
Scarcity, opportunity cost, and marginal analysis Alex is training for a triathlon, a timed race that combines swimming, biking, and running. Consider the following sentence: Because his pool sessions are helping him swim more quickly, Alex plans to reduce by 1 hour per week the time he spends training on the bike and increase by 1 hour the time he spends in the swimming pool; however, his wife says that he should stop doing any biking and running and spend all 20 hours per week in the pool. Which basic principle of individual choice does Alex's plan illustrate that his wife's advice does not?
a. All costs are opportunity costs.
b. People usually exploit opportunities to make themselves better off.
c. Resources are scarce.
d. Many decisions are made on the margin.
Answer:
D
Explanation:
Marginal decisions involves considering the cost and benefit of taking a particular action. If the marginal benefit of taking a particular action exceeds the marginal cost, the activity should be undertaken
The hyrbrid automobile grew out of automobile designers' realization that there were changes in the legal environment regarding automobile emissions to which they need not comply.
a. True
b. False
Answer: True
Explanation:
Hybrid cars use both electricity and gasoline motors and engines. The concept behind this is that the electricity gives the car better acceleration and the gasoline then maintains it.
Developed countries tax gasoline due to its emissions but don't really tax electricity. On realizing this, designers recognized that they could combine both gasoline and electricity to create hybrids that would decrease the cost of taxation of using gasoline.
You are to receive a cash flow of $1,500 two years from now. Once received, you will invest the money and earn a 10.5% return. What is the value of the investment in year 5?
Answer:
$2,471.17
Explanation:
The value of the investment in 5 years time from the day of investment is known as the Future Value.
The Future Value is calculated by compounding the Principle Amount (amount invested) using the effective interest rate.
We can determine the Future Value using a Financial Calculator as follows :
PV = - $1,500
PMT = $0
P/YR = 1
N = 5
I = 10.5%
FV = ??
The Future Value (FV) is $2,471.17
Thus,
the value of the investment in year 5 is $2,471.17
The endpoint method computes the percent change as a percent of the starting value.
a. True
b. False
Answer: True
Explanation:
Endpoint elasticity measures the price change and demand during the endpoint of the change. It uses a simple formula for the calculation of the price and the demand relationships. The formula is:
= (D2 - D1)/D1 ÷ (P2 - P1)/P1
where,
D2 = new demand
D1 = initial demand
P2 = new price
P1 = initial price.
The statement that "The endpoint method computes the percent change as a percent of the starting value" is true.
Mabbe Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 800 units and of Product B is 600 units. There are three activity cost pools, with estimated costs and expected activity as follows:
Activity Cost Pools Estimated Overhead Cost Expected Activity
Product A Product B Product C
Activity 1 $17460 600 600 1200
Activity 2 $19987 1700 600 2300
Activity 3 $29884 400 120 520
The activity rate for Activity 2 is closest to: __________
a. $29.274
b. $33.311
c. $11.764
d. $8.69
Answer:
d. $8.69
Explanation:
Activity rate for Activity 2 = Estimated Overhead Cost / Expected Activity
Activity rate for Activity 2 = $19,987.00 / 2300
Activity rate for Activity 2 = $8.69 per activity
Consider a telephone call to London that currently would cost $5. If the real price of telephone calls does not change in the future, how much will it cost you to make a call to London in 50 years if the inflation rate is 5% (roughly its average over the past 30 years)? What if inflation is 10%.
Answer:
If inflation were 5%, the value of the call in 50 years would be $ 57.33; while if inflation were 10% the value of the call would be $ 586.95.
Explanation:
Given that a telephone call to London that currently would cost $ 5, to determine, if the real price of telephone calls does not change in the future, how much will it cost you to make a call to London in 50 years if the inflation rate is 5% and if inflation is 10%, the following calculations must be made:
5 x 1.05 ^ 50 = X
5 x 11.4674 = X
57.33 = X
5 x 1.1 ^ 50 = X
5 x 117.39 = X
586.95 = X
Therefore, if inflation were 5%, the value of the call in 50 years would be $ 57.33; while if inflation were 10% the value of the call would be $ 586.95.
Below are several amounts reported at the end of the year. Currency located at the company $ 950 Supplies 2,800 Short-term investments that mature within three months 1,850 Accounts receivable 3,100 Balance in savings account 8,100 Checks received from customers but not yet deposited 550 Prepaid rent 1,350 Coins located at the company 100 Equipment 9,000 Balance in checking account 5,800 Required: Calculate the amount of cash to report in the balance sheet.
Answer:
$17,350
Explanation:
Calculation to determine the amount of cash to report in the balance sheet.
Currency located at the company $950
Add Short-term investments that mature within three months 1,850
Add Balance in savings account 8,100
Add Checks received from customers but not yet deposited 550
Add Coins located at the company 100
Add Balance in checking account 5,800
Total Cash $17,350
Therefore the amount of cash to report in the balance sheet is $17,350
The following information was taken from Charu Company's balance sheet: Fixed assets (net) $860,000 Long-term liabilities 200,000 Total liabilities 600,000 Total stockholders’ equity 250,000 Determine the company's (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to stockholders' equity. If required, round your answers to one decimal place. a. Ratio of fixed assets to long-term liabilities fill in the blank 1 b. Ratio of liabilities to stockholders' equity
Answer:
A. 4.3
B. 2.4
Explanation:
(a) Calculation to determine ratio of fixed assets to long-term liabilities
Using this formula
Ratio of fixed assets to long-term liabilities =Fixed assets (net)/Long-term liabilities
Let plug in the formula
Ratio of fixed assets to long-term liabilities= $860,000 /$200,000
Ratio of fixed assets to long-term liabilities=4.3
Therefore Ratio of fixed assets to long-term liabilities is 4.3
(b) Calculation to determine ratio of liabilities to stockholders' equity
Using this formula
Ratio of liabilities to stockholders' equity=Liabilities/Total stockholders’ equity
Let plug in the formula
Ratio of liabilities to stockholders' equity=$600,000 /$250,000
Ratio of liabilities to stockholders' equity=2.4
Therefore ratio of liabilities to stockholders' equity is 2.4
