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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Liabilities | Amt | Assets | Amt |
Accounts payable | 5,000 | Machine and equipment | 15,000 |
Long term debt | 8,700 | Cash on hand | 1,500 |
Current portion of long term debts | 1,700 | Merchandise inventory | 12,400 |
Accrued interest payable | 1,400 | Buildings and improvements | 20,000 |
Mortgage payable | 14,500 | 6,200 | |
Capital | 74,500 | Land | 50,000 |
Prepaid expenses | 700 | ||
105,800 | 105,800 | ||
Compute for and interpret the following:
a.
b.
c. Acid-test ratio
d. Net capital ratio
e. Networth ratio
f. Debt/Asset ratio
g. Debt/Equity ratio
3. What can you say about the short-run and long-run financial conditions of Farm A?
4. What do you think is the main limitation of the given information? Can you effectively analyze both the short-run and long-run positions of Farm A? Why or why not?
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