The bond indenture for the 20-year, 11% debenture bonds dated January 2, 2007, required working capital of
Question:
The bond indenture for the 20-year, 11% debenture bonds dated January 2, 2007, required working capital of $560,000, a current ratio of 1.5, and a quick ratio of 1.2 at the end of each calendar year until the bonds mature. At December 31, 2008, the three measures were computed as follows:
1.
2. Current Ratio = 1.50 ($600,500/$400,000)
3. Quick Ratio = 2.04 ($511,000/$250,000)
a. List the errors in the determination of the three measures of current position analysis.
b. Is the company satisfying the terms of the bondindenture?
Transcribed Image Text:
Current assets 95,000 171,000 20,000 4,500 55,000 65,000 Accounts and notes receivable (net).. . . . . Inventories. $600,500 Current liabilities: Accounts and short-term notes payable... $250,000 Total current liabilities 400,000 $200,500
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 83% (6 reviews)
a The working capital current ratio and quick ratio are calculated incorrectly The working capital a...View the full answer
Answered By
Lamya S
Highly creative, resourceful and dedicated High School Teacher with a good fluency in English (IELTS- 7.5 band scorer) and an excellent record of successful classroom presentations.
I have more than 2 years experience in tutoring students especially by using my note making strategies.
Especially adept at teaching methods of business functions and management through a positive, and flexible teaching style with the willingness to work beyond the call of duty.
Committed to ongoing professional development and spreading the knowledge within myself to the blooming ones to make them fly with a colorful wing of future.
I do always believe that more than being a teacher who teaches students subjects,...i rather want to be a teacher who wants to teach students how to love learning..
Subjects i handle :
Business studies
Management studies
Operations Management
Organisational Behaviour
Change Management
Research Methodology
Strategy Management
Economics
Human Resource Management
Performance Management
Training
International Business
Business Ethics
Business Communication
Things you can expect from me :
- A clear cut answer
- A detailed conceptual way of explanation
- Simplified answer form of complex topics
- Diagrams and examples filled answers
4.90+
46+ Reviews
54+ Question Solved
Related Book For
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
Question Posted:
Students also viewed these Managerial Accounting questions
-
The bond indenture for the 10-year, 10% debenture bonds dated January 2, 2009, required working capital of $142,000, a current ratio of 1.7, and a quick ratio of 1.2 at the end of each calendar year...
-
The bond indenture for the 10-year, 10% debenture bonds dated January 2, 2009, required working capital of $142,000 a current ratio of 1.7, and a quick ratio of 1.2 at the end of each calendar year...
-
The bond indenture for the 10-year, 8% debenture bonds dated January 2, 20Y8, required working capital of $200,000, a current ratio of 2.0, and a quick ratio of 1.0 at the end of each calendar year...
-
As a security architect for a medium-sized firm, briefly describe how would you approach the following case problems: 1. Sending encrypted email to third parties. 2. Encrypting sensitive data inside...
-
(a) Mylar Corporation has collected the following information related to its December 31, 2017, balance sheet. Accounts receivable .................................................... $22,000...
-
Suppose that you know the slope and the coordinates of a point on a line. How could you draw the line without first finding its equation?
-
Look carefully at the wording of the debit entry for items 11 and 12. What is being debited, the amount due, or the people who owe the business these amounts?
-
Connect Air completed the following transactions during 2017: Oct. 15 Paid $10,000 for advertising and promotional material covering the four-month period ending February 15, 2018. Nov. 1 Received...
-
15 Suppose T = L(V). Suppose S = L(V) is invertible. (a) Prove that T and S-1TS have the same eigenvalues. (b) What is the relationship between the eigenvectors of T and the eigenvectors of STS?
-
Crop-Quick Inc. replenishes its three distribution centers in Boston, Denver and Houston from its Las Vegas central supply warehouse. The distribution schedule for one of its products for the next...
-
PepsiCo, Inc., the parent company of Frito-Lay snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years: a. Determine the (1) Current...
-
The following data are taken from the financial statements of Creekside Technology Inc. Terms of all sales are 2/10, n/60. a. Determine for each year (1) The accounts receivable turnover and (2) The...
-
The CJ, Inc. comparative income statement follows. The 2014 data are given as needed. Requirements 1. Calculate the profit margin for 2016 and 2015. 2. Calculate the rate of return on total assets...
-
The current zero-coupon yield curve for risk-free bonds is as follows: . What is the price per $100 face value of a two-year, zero-coupon, risk-free bond? The price per $100 face value of the...
-
how to find and extract hidden data. You are required to submit screen captures to show the highlighted steps in the instruction for this part.
-
For the most recent period, Ayayai Company earned sales of $164000 and a gross margin of $52070. If the selling price per unit was $4, what is the product cost per unit?
-
The president has frequently outed the media as "fake news" - to what extent does this damage the relationship between the government and the press? BASED ON Lee Epstein and Thomas Walker:...
-
Consider the following information for JJJ Company: In July, they purchased 100 units of stock at $4 each. In August, they purchased 140 units of stock at $6 each. In September, they sold 40 units of...
-
Simplify the following algebraic expressions (a) 5x + 2x x (b) (2a + 3b) (a b) (c) 2m [3m + 2n (4m + n)]
-
Draw two scatterplots, one for which r = 1 and a second for which r = 21.
-
Calculate the work expended when a particle is moved from \(O\) to \(Q\) along segments \(\overline{O P}\) and \(\overline{P Q}\) in Figure 19 in the presence of the force field...
-
The following are selected transactions that may affect stockholders' equity. 1. Recorded accrued interest earned on a note receivable. 2. Declared and distributed a stock split. 3. Declared a cash...
-
Addison Corporation has ten million shares of common stock issued and outstanding. On June 1 the board of directors voted a 60 cents per share cash dividend to stockholders of record as of June 14,...
-
Addison Corporation has ten million shares of common stock issued and outstanding. On June 1 the board of directors voted a 60 cents per share cash dividend to stockholders of record as of June 14,...
-
A car costing $39,000 is leased at 4.4% compounded semi-annually for 6 years. What is the amount of the monthly lease payment excluding taxes? Round your answer to 2 decimal places. Your Answer:
-
Compute 3 22 The 6xy ds, where S is the surface of the tetrahedron with sides z = 0, y = 0, x + z = 1, and x = y. x
-
Binary search trees have their best performance when they are balanced, which means that at each node n, the size of the left subtree of n is within one of the size of the right subtree of n. Write a...
Study smarter with the SolutionInn App