Homework Answers
| Effects | Debt-to Asset ratio | ||||
| a | Purchased $50,000 of new inventory on credit | Same | 0.75 | ||
| b | Paid accounts payable in the amount of $95,000 | Same | 0.75 | ||
| c | Recorded accrued salaries in the amount of $175,000 | Increase | 0.98 | ($737,500/$750,000) | |
| d | Borrowed $325,000 from a local bankto be repaid in 90 days | Same | 0.75 | ||
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BSO, Inc., has assets of $750,000 and liabilities of $562,500 resulting in a debt-to-assets ratio of...
BSO, Inc., has assets of $680,000 and liabilities of $510,000 resulting in a debt-to-assets ratio of...
BSO, Inc., has assets of $680,000 and liabilities of $510,000 resulting in a debt-to-assets ratio of 0.75. For each of the following transactions, determine whether the debt-to-assets ratio will increase, decrease, or remain the same, and enter the value of the new debt-to-assets ratio. Each item is independent. (Round your answers to 2 decimal places.) Debt-to-Assets Ratio a. Purchased $36,000 of new inventory on credit. b. Paid accounts payable in the amount of $74,000. c. Recorded accrued salaries in the...
BSO, Inc., has assets of $830,000 and liabilities of $622,500 resulting in a debt-to-assets ratio of...
BSO, Inc., has assets of $830,000 and liabilities of $622,500
resulting in a debt-to-assets ratio of 0.75. For each of the
following transactions, determine whether the debt-to-assets ratio
will increase, decrease, or remain the same, and enter the value of
the new debt-to-assets ratio. Each item is independent.
(Round your answers to 2 decimal places.)
Debt-to- Assets Ratio a. Purchased $66,000 of new inventory on credit. b. Paid accounts payable in the amount of $119,000. c. Recorded accrued salaries in...
Check my work BSO, Inc., has assets of $790,000 and liabilities of $592,500 resulting in a...
Check my work BSO, Inc., has assets of $790,000 and liabilities of $592,500 resulting in a debt-to-assets ratio of 0.75. For each of the following transactions, determine whether the debt-to-assets ratio will increase, decrease, or remain the same, and enter the value of the new debt-to-assets ratio. Each item is independent. (Round your answers to 2 decimal places.) Debt-to-Assets Ratio a. Purchased $58,000 of new inventory on credit. b. Paid accounts payable in the amount of $107,000. c. Recorded accrued...
4. A firm has Debt-Equity ratio of 1.2 and Total Assets of $2 million. What must...
4. A firm has Debt-Equity ratio of 1.2 and Total Assets of $2 million. What must be total debt? 5. A firm has sales of $355,000, net income of $28,000, and dividends of $12,500. Total debt is $73,000 and Total equity is $95,000. If the firm grows at the SGR, issues no new equity, and maintains its Debt-Equity ratio, how much must be borrowed?
4. A firm has Debt-Equity ratio of 1.2 and Total Assets of $2 million. What must...
4. A firm has Debt-Equity ratio of 1.2 and Total Assets of $2 million. What must be total debt? 5. A firm has sales of $355,000, net income of $28,000, and dividends of $12,500. Total debt is $73,000 and Total equity is $95,000. If the firm grows at the SGR, issues no new equity, and maintains its Debt-Equity ratio, how much must be borrowed?
Southwestern Wear Inc. has the following balance sheet: Current assets $1,875,000 Accounts payable $375,000 Fixed assets 1,875,000 Notes payable 750,000 Subordinated debentures 750,000 Total debt $1,8...
Southwestern Wear Inc. has the following balance sheet: Current assets $1,875,000 Accounts payable $375,000 Fixed assets 1,875,000 Notes payable 750,000 Subordinated debentures 750,000 Total debt $1,875,000 Common equity 1,875,000 Total assets $3,750,000 Total liabilities and equity $3,750,000 The trustee's costs total $257,000, and the firm has no accrued taxes or wages. Southwestern has no unfunded pension liabilities. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors...
Trect of Transactions on Debt-to-Equity Ratio The following account balances are taken from the records of...
Trect of Transactions on Debt-to-Equity Ratio The following account balances are taken from the records of Monet's Garden Inc.: Current liabilities Long-term abilities Stockholders' equity $150,000 375.000 400,000 Required: 1. Use the information provided to compute Monet's debt-to-equity ratio. Round to three decimal points. to 1 2. Determine the effect that each of the following transactions will have on Monet's debt-to-equity ratio by recalculating the ratio and then indicating whether the ratio is increased, decreased, or not affected by the...
2. Christopher construction, Inc. has current assets of $20,000 and current liabilities of $10,000. If we...
2. Christopher construction, Inc. has current assets of $20,000 and current liabilities of $10,000. If we assume that each transaction is independent, what is the effect of each of the following transaction on Christopher Construction Inc.’s current ratio? Compute the current ratio for each case. a) $2000 of accounts payable are paid off with cash. b) Inventories of $5000 are purchased on credit. c) Additional common stock is sold for $4000 cash. d) A long-term debt of $2,000 is obtained,...
2. Christopher construction, Inc. has current assets of $20,000 and current liabilities of $10,000. If we...
2. Christopher construction, Inc. has current assets of $20,000 and current liabilities of $10,000. If we assume that each transaction is independent, what is the effect of each of the following transaction on Christopher Construction Inc.’s current ratio? Compute the current ratio for each case. a) $2000 of accounts payable are paid off with cash. b) Inventories of $5000 are purchased on credit. c) Additional common stock is sold for $4000 cash. d) A long-term debt of $2,000 is obtained,...
2. Christopher construction, Inc. has current assets of $20,000 and current liabilities of $10,000. If we...
2. Christopher construction, Inc. has current assets of $20,000 and current liabilities of $10,000. If we assume that each transaction is independent, what is the effect of each of the following transaction on Christopher Construction Inc.’s current ratio? Compute the current ratio for each case. a) $2000 of accounts payable are paid off with cash. b) Inventories of $5000 are purchased on credit. c) Additional common stock is sold for $4000 cash. d) A long-term debt of $2,000 is obtained,...
BSO, Inc., has assets of $830,000 and liabilities of $622,500
resulting in a debt-to-assets ratio of 0.75. For each of the
following transactions, determine whether the debt-to-assets ratio
will increase, decrease, or remain the same, and enter the value of
the new debt-to-assets ratio. Each item is independent.
(Round your answers to 2 decimal places.)
Debt-to- Assets Ratio a. Purchased $66,000 of new inventory on credit. b. Paid accounts payable in the amount of $119,000. c. Recorded accrued salaries in...
Check my work BSO, Inc., has assets of $790,000 and liabilities of $592,500 resulting in a debt-to-assets ratio of 0.75. For each of the following transactions, determine whether the debt-to-assets ratio will increase, decrease, or remain the same, and enter the value of the new debt-to-assets ratio. Each item is independent. (Round your answers to 2 decimal places.) Debt-to-Assets Ratio a. Purchased $58,000 of new inventory on credit. b. Paid accounts payable in the amount of $107,000. c. Recorded accrued...
4. A firm has Debt-Equity ratio of 1.2 and Total Assets of $2 million. What must be total debt? 5. A firm has sales of $355,000, net income of $28,000, and dividends of $12,500. Total debt is $73,000 and Total equity is $95,000. If the firm grows at the SGR, issues no new equity, and maintains its Debt-Equity ratio, how much must be borrowed?
4. A firm has Debt-Equity ratio of 1.2 and Total Assets of $2 million. What must be total debt? 5. A firm has sales of $355,000, net income of $28,000, and dividends of $12,500. Total debt is $73,000 and Total equity is $95,000. If the firm grows at the SGR, issues no new equity, and maintains its Debt-Equity ratio, how much must be borrowed?
Trect of Transactions on Debt-to-Equity Ratio The following account balances are taken from the records of Monet's Garden Inc.: Current liabilities Long-term abilities Stockholders' equity $150,000 375.000 400,000 Required: 1. Use the information provided to compute Monet's debt-to-equity ratio. Round to three decimal points. to 1 2. Determine the effect that each of the following transactions will have on Monet's debt-to-equity ratio by recalculating the ratio and then indicating whether the ratio is increased, decreased, or not affected by the...
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