Required information [The following information applies to the questions displayed below.) You have been given responsibility for overseeing a bank's small business loans division. The bank has included loan covenants requiring a minimum current ratio of 1.20 in all small business loans. When you ask which inventory costing method the covenant assumes, the previous loans manager gives you a blank look. To explain to him that a company's inventory costing method is important, you present the following balance sheet information. $ 25 (a) 143 Current assets other than inventory Inventory Other (noncurrent) assets $ (b) $ 45 Total assete Current liabilities Other (noneurrent) liabilities Stockholders' equity 50 (d) $ (c) Total liabilities and stockholders equity You ask the former loans manager to find amounts for (a). (b). (4. and (d) assuming the company began the year with 3 units of inventory at a unit cost of $10, then purchased 6 units at a cost of $11 each, and finally purchased 4 units at a cost of $15 each. A year-end inventory count determined that 2 units are on hand. 3. Determine the amount for (a) using LIFO, and then calculate (b) through (d). Amount Inventory Total Assets Total Liabilities and Stockholders' Equity Stockholders' Equity
Required information [The following information applies to the questions displayed below.) You have been given responsibility for overseeing a bank's small business loans division. The bank has included loan covenants requiring a minimum current ratio of 1.20 in all small business loans. When you ask which inventory costing method the covenant assumes, the previous loans manager gives you a blank look. To explain to him that a company's inventory costing method is important, you present the following balance sheet information. $ 25 (a) 143 Current assets other than inventory Inventory Other (noncurrent) assets $ (b) $ 45 Total assete Current liabilities Other (noneurrent) liabilities Stockholders' equity 50 (d) $ (c) Total liabilities and stockholders equity You ask the former loans manager to find amounts for (a). (b). (4. and (d) assuming the company began the year with 3 units of inventory at a unit cost of $10, then purchased 6 units at a cost of $11 each, and finally purchased 4 units at a cost of $15 each. A year-end inventory count determined that 2 units are on hand. 3. Determine the amount for (a) using LIFO, and then calculate (b) through (d). Amount Inventory Total Assets Total Liabilities and Stockholders' Equity Stockholders' Equity
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Required information
[The following information applies to the questions displayed below.)
You have been given responsibility for overseelng a bank's small business loans division. The bank has included loan
covenants requiring a minimum current ratio of 1.20 in all small business loans. When you ask which Inventory costing
method the covenant assumes, the previous loans manager gives you a blank look. To explain to him that a company's
inventory costing method is important, you present the following balance sheet information.
$ 25
(a)
Current anseta other than inventory
Inventory
143
Other (noncurrent) assets
$ (b)
$ 45
50
Total assets
Current liabilities
other (noncurrent) liabilities
Stockholders' equity
(d)
$ (c)
Total liabilities and stockholdera equity
You ask the former loans manager to find amounts for (a), (b), (), and (d) assuming the company began the year with 3
units of inventory at a unit cost of $10, then purchased 6 units at a cost of $11 each, and finally purchased 4 units at a cost
of $15 each. A year-end inventory count determined that 2 units are on hand.
3. Determine the amount for (a) using LIFO, and then calculate (b) through (d).
Amount
Inventory
Total Assets
Total Liabilities and Stockholders' Equity
Stockholders' Equity
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