The accounting records of Braintree Foods, Inc., include the following items at December 31, 2017: Requirements 1.

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The accounting records of Braintree Foods, Inc., include the following items at December 31, 2017:

The accounting records of Braintree Foods, Inc., include the following

Requirements
1. Show how each relevant item would be reported on the Braintree Foods, Inc., classified balance sheet, including headings and totals for current liabilities and long-term liabilities.
2. Answer the following questions about Braintree's financial position at December 31, 2017:
a. What is the carrying amount of the bonds payable? (Combine the current and long-term amounts.)
b. Why is the interest-payable amount so much less than the amount of interest expense?
3. How many times did Braintree cover its interest expense during 2017?
4. Assume that all of the existing liabilities are included in the information provided.
Calculate the leverage ratio and debt ratio of the company. Evaluate the health of the company from a leverage point of view. What other information would be helpful in making your evaluation?
5. Independent of your answer to (4), assume that Footnote 8 of the financial statements includes commitments for operating leases over the next 15 years in the amount of $3,000,000. If the company had to capitalize these leases in 2017, how would it change the leverage ratio and the debt ratio? How would this change impact your assessment of the company's health from a leverage point of view?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Financial Accounting

ISBN: 978-0134564142

6th Canadian edition

Authors: Walter Jr. Harrison, Charles T. Horngren, C. William Thomas, Greg Berberich, Catherine Seguin

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