Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Chapter 9, Problem 37BE
1.
To determine
Compute Company C’s debt ratio as of December 31, 2018.
2.
To determine
Compute Company C’s interest coverage ratio for 2018.
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The following information relates to Basic Lid. for the year ended 31" December 2021:
Net working capital
RO. 1.200.000
Fixed assets to proprietor's fund ratio
0.75
Working capital turnover ratio
5 timeg
Return on Equity 15%
Current liabilities
RO. 400.000
Long term Debts 0
You are required to calculate:
Proprietor's funds
Fixed Assets
Current assets
Net profit ratio
Current ratio
From the balance sheet prepare a proforma income statement where revenues can increase by 2% and the firm can borrow at 5.5%
BALANCE SHEET
2021
Cash and cash equivalents
280
Receivables
2588
Inventory
2516
Other CA
189
TOTAL CA
5573
Fixed assets
5024
TOTAL ASSETS
10597
Accounts payable
4713
Short term debt
78
TOTAL CL
4790
LT debt
921
Shareh. Equity
4886
TOTAL LIAB. AND SHARH. EQUITY
10597
INCOME STATEMENT
2021
Sales
19418
COGS
13136
Depreciations
354
SG&A
4952
EBIT
976
Interest Expenses
52
Tax
268
Net income
656
Pro-forma statement
Pro Forma Forecasts
Actual
Projected
Projected
Projected
Projected
Projected
2021
2022
2023
2024
2025
2026
COGS/REVENUES
SGA/SALES
INVENTORIES/COGS
OTHER CA/SALES
AR/SALES
AP/COGS
SALES/FIXED ASSETS
DEPR/ FIXED ASSETS
EQUITY/INVESTED CAPITAL
ST DEBT/INVESTED…
Evaluation Scale
7:33
8
7
5-6
Debt (Liabilities) and Equity
Current debt:
10
Accounts payable
Accruals
Short-term notes
Total current debt
Long-term debt
Total debt
Equity
TOTAL DEBT AND
EQUITY
$10,000 $12,000
$7,000 $8,000
$5,000 $5,000
$22,000 $25,000
Directions: answer the following questions:
1. Given the information provided by the financial statements,
what would you tell Abrahams? (As part of your answer,
calculate the firm's cash flows.)
2. How would you describe the cash flow pattern for the Maitz
Company?
$15,000 $15,000
In 500-750 words, submit this assignment in MS Word to your
instructor via the dropbox. This assignment is worth 30 marks.
You will be graded on the following evaluation rubric:
Evaluation Scale x Criteria = Total Marks
$37,000 $40,000
$55,000 $60,000
9-10 Exemplary level of performance or understanding.
Mastery level of performance or understanding.
Approaching mastery level of performance or understanding.
Adequate level of performance or understanding not…
Chapter 9 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 9.A - Calculate employee payroll (Learning Objective 8)...Ch. 9.A - Calculate net pay (Learning Objective 8) 5-10 min....Ch. 9.A - Employer payroll costs (Learning Objective 8) 5-10...Ch. 9.A - Prob. 4AECh. 9.A - Prob. 5AECh. 9.A - Prob. 6AECh. 9.A - Prob. 7BECh. 9.A - Prob. 8BECh. 9.A - Calculating gross and net pay (Learning Objective...Ch. 9.A - Calculating gross and net pay (Learning Objective...
Ch. 9.A - Calculating gross and net pay (Learning Objective...Ch. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Prob. 4DQCh. 9 - What is the distinguishing feature of the...Ch. 9 - Prob. 6DQCh. 9 - Will interest expense be more than, less than, or...Ch. 9 - Prob. 8DQCh. 9 - What are the differences between an operating...Ch. 9 - Prob. 10DQCh. 9 - Known liabilities of uncertain amounts should be...Ch. 9 - Prob. 2SCCh. 9 - Prob. 3SCCh. 9 - Prob. 4SCCh. 9 - Which term is used to describe an unsecured bond?...Ch. 9 - Prob. 6SCCh. 9 - Plavix Corporations bonds payable carry a stated...Ch. 9 - Prob. 8SCCh. 9 - Martin s bonds pay interest semiannually on July 1...Ch. 9 - Prob. 10SCCh. 9 - Prob. 11SCCh. 9 - Prob. 12SCCh. 9 - Prob. 1SECh. 9 - Prob. 2SECh. 9 - Prob. 3SECh. 9 - Prob. 4SECh. 9 - Prob. 5SECh. 9 - Prob. 6SECh. 9 - Bond terms (Learning Objective 5) 5-10 min. Match...Ch. 9 - Determining the issue price for bonds (Learning...Ch. 9 - Prob. 9SECh. 9 - Prob. 10SECh. 9 - Accounting for bonds (Learning Objective 5) 15-20...Ch. 9 - Prob. 12SECh. 9 - Prob. 13SECh. 9 - Prob. 14SECh. 9 - Prob. 15SECh. 9 - Prob. 16AECh. 9 - Accounting for notes payable (Learning Objective...Ch. 9 - Prob. 18AECh. 9 - Prob. 19AECh. 9 - Prob. 20AECh. 9 - Prob. 21AECh. 9 - Prob. 22AECh. 9 - Prob. 23AECh. 9 - Classifying notes payable as current or long-term...Ch. 9 - Disclosing liabilities on a balance sheet...Ch. 9 - Prob. 26AECh. 9 - Prob. 27BECh. 9 - Prob. 28BECh. 9 - Prob. 29BECh. 9 - Prob. 30BECh. 9 - Prob. 31BECh. 9 - Prob. 32BECh. 9 - Prob. 33BECh. 9 - Prob. 34BECh. 9 - Classifying notes payable as current or long-term...Ch. 9 - Prob. 36BECh. 9 - Prob. 37BECh. 9 - Prob. 38APCh. 9 - Prob. 39APCh. 9 - Prob. 40APCh. 9 - Prob. 41APCh. 9 - Prob. 42APCh. 9 - Prob. 43APCh. 9 - Prob. 44APCh. 9 - Prob. 45BPCh. 9 - Prob. 46BPCh. 9 - Prob. 47BPCh. 9 - Prob. 48BPCh. 9 - Prob. 49BPCh. 9 - Prob. 50BPCh. 9 - Prob. 51BPCh. 9 - Prob. 1CECh. 9 - Prob. 1CPCh. 9 - Prob. 1CFSAPCh. 9 - Prob. 1EIACh. 9 - Case 2. Sherry Talbot, the CEO of Talbot...Ch. 9 - Prob. 1FACh. 9 - Prob. 1IACh. 9 - Small-Business Analysis Purpose: To help you...Ch. 9 - Prob. 1WC
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