The bond indenture for the 10-year, 10% debenture bonds dated January 2, 2009, required working capital of
Question:
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 until the bonds mature. At December 31, 2010, the three measures were computed as follows:
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:
1. Current assets: Cash $170,000 Temporary investments Accounts and notes receivable (net) Inventories 80,000 200,000 60,000 Prepaid expenses Intangible assets Property, plant and equipment Total current assets (net) 40,000 208,000 92,000 S850,000 Current liabilities: Accounts and short-term notes payable Accrued liabilities $160,000 340,000 Total current liabilities 500,000 Working capital $350,000 2. Current ratio 1.7 ১৪50,000 + $500,000 3. Quick ratio 1.2 $192,000 + $160,000
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 56% (16 reviews)
a The working capital current ratio and quick ratio are calculated incorrectly The working capital a...View the full answer
Answered By
Saud Ur Rehman
Evaluating manufacturing processes by designing and conducting research programs; applying knowledge of product design, fabrication, assembly, tooling, and materials; conferring with equipment vendors; soliciting observations from operators. Developing manufacturing processes by studying product requirements; researching, designing, modifying, and testing manufacturing methods and equipment; conferring with equipment vendors. Keeping equipment operational by coordinating maintenance and repair services; following manufacturer's instructions and established procedures; requesting special service.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Managerial Accounting questions
-
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...
-
The bond indenture for the 10-year, 9% debenture bonds issued January 2, 2015, required working capital of $100,000, a current ratio of 1.5, and a quick ratio of 1.0 at the end of each calendar year...
-
What is the correct answer (with the appropriate number of significant figures) for the calculation of 7.5+ 2.26 + 1.311+ 2? 13 13.071 10 13.0
-
In recent years, Avery Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant was in charge of selecting the depreciation method...
-
Explain what it means for suppliers to have a credible threat of forward integration.
-
Explain the relevance of inventory in the determination of gross profit.
-
Two horizontal parallel conducting rods are connected such that a conducting crossbar free to slide along them has a constant current \(I\) running through it (Figure P27.34). The rods are separated...
-
Jan, Pat, and Misa are partners in South Central Company. The partnership agreement states that Jan is to receive 8 percent interest on his capital balance at the beginning of the year, Pat is to...
-
1. Electric potential is given by V=6x-8xy-8y+6yz - 4z Then magnitude of electric force acting on 2C point charge placed on origin will be :- (1) 2N (2) 6N (3) 8N (3) 8N (4) 20 N 2. Figure shows...
-
Brothers Herm and Steve Hargenrater began operations of their tool and die shop (H & H Tool) on January 1, 1987, in Meadville, PA. The annual reporting period ends December 31. Assume that the trial...
-
PepsiCo, Inc., the parent company of Frito-LayTM 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 McKee Technology Inc. Terms of all sales are 2/10, n/60. a. For 2010 and 2009, determine (1) the accounts receivable turnover and (2) the...
-
The following graph is called a circle graph or pie chart. Each sector (shaped like a piece of pie) shows the fraction of entering college freshmen who choose to major in each discipline shown. The...
-
It is Monday morning. As you enter the elevator at your workplace, you discover that you--and you alone--are there with the President of the company. Although you have met only twice before, she...
-
Google eagerly relies on machines as opposed to individuals since machines are coordinated correspondingly which gives individuals heaps of decisions to look at. This decision given by the machine is...
-
Problem S: (17 points - Project Planning Excel Tools) You just landed a job as the project manager for a national research lab. All project and operations use Scrum, an agile project management...
-
Complete the following for the system of equations. 4x-8y = 9 0.8x 1.6y 1.8 (a) Use a graphing utility to graph the equations in the system. y 10. 10 10 3 10 -10 3 10 10 10 10 10 y 10 -10 (b) Use the...
-
Capital Structure Project - W. M. Wrigley Jr.(10pts * 6 = 60 pts) For this project, please use Excel to do your calculations and analysis and then type a report in MS Word. Your report should clearly...
-
Employers that do not accommodate the needs of persons with disabilities must demonstrate that the accommodations would cause undue hardship. (True/False)
-
Use multiplication or division of power series to find the first three nonzero terms in the Maclaurin series for each function. y = e x2 cos x
-
If 1.00 g of gray zinc powder reacts with 0.49 g of yellow sulfur powder, what is the mass of the zinc sulfide product?
-
Partially completed budget performance reports for Meridian Company, a manufacturer of air conditioners, are provided below. a. Complete the budget performance reports by determining the correct...
-
The following data were summarized from the accounting records for Statham Construction Company for the year ended November 30, 2012. Prepare divisional income statements for Statham...
-
In divisional income statements prepared for Iguana Construction Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll checks, and the...
-
(i) When should a firm cut dividend pay out rate and increase retention rate to maximize share price? (ii) How can the dividend-discount model handle changing growth rates?
-
November 2021 (actual) December 2021 (budgeted) January 2022 (budgeted) Cash sales $ 80.000 Credit sales Total sales 240,000 $320,000 $100,000 360,000 $460,000 $ 60,000 180,000 $240,000 Management...
-
A firm has 200 shareholders, you among them. Each shareholder owns $20 worth of sto addition, Mr. Hostile owns 50 shares (for a firm total of 250 shares) and is trying to fi management. In an attempt...
Study smarter with the SolutionInn App