Question

Three commonly used measures of solvency are the debt- to- equity ratio the times interest earned ratio, and the cash coverage ratio. For each of the following transactions, determine whether the measure will increase, decrease, or not change.
Assume that all ratios are higher than 1.
a. Issued shares in exchange for equipment for $ 500,000.
b. Issued bonds at par for $ 1 million cash.
c. Previously declared dividends are paid in cash.
d. Accrued interest expense is recorded.
e. A customer pays money on his trade receivable.


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  • CreatedAugust 04, 2015
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