The following condensed balance sheet for December 31, 2012, comes from the records of Buzz and Associates:

Buzz and Associates is considering the purchase of a new piece of equipment for $30,000. The company does not have enough cash to purchase it outright, so it is considering alternative ways of financing. AS management sees it, there are three basic options: (1) issue 3,000 ownership shares for $10 per share, (2) take out a long-term loan (12 percent annual) interest) for $30,000 from the bank, or (3) purchase the equipment on open account (must be paid in full in thirty days). Presently Buzz has 12,000 ownership shares outstanding.Required:a. Compute the present current ratio (current assets/current liabilities), the debt/equity ratio (total liabilities/shareholders' equity), and the book value of Buzz's outstanding ownership shares: (total assets minus total liabilities) divided by number of shares outstanding.b. Compute the current ratio, debt/equity ratio, and book value per share under each of the three financing alternatives, and express your answer in the following format:Financing Alternative Current Ratio Debt/Equity Ratio Book Value per Share1. Share issuance2. Long-term note3. Open accountc. Discuss some of the pros and cons associated with each of the three financing options.d. The chairman of the board of directors stated at a recent board meeting that with $50,000 in Retained Earnings, the company should be able to purchase the $30,000 piece of equipment. Comment on the chairman's statement.

Assets Cash Other current assets Property, plant, and equipment Liabilities and Shareholders' Equity Current liabilities Long-term notes payable Contributed capital Retained earnings Total liabilities and shareholders' equity S 10.000 S 20,000 40.000 70.000 20,000 30,000 51,000 Total assets S120.000 S120,000