Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance shee would be affected and by how much. Also indicate the change to Global's book value of equity. a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt. b. A warehouse fire destroyed $5.2 million worth of uninsured inventory. c. Global used $47 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building. d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment. e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 46%. f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices. a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt. (Select the best choice below.) O A. Long-term liabilities would decrease by $19.6 million, and cash would decrease by the same amount. The book value of equity would change by $19.6. O B. Long-term liabilities would decrease by $19.6 million, and cash would decrease by the same amount. The book value of equity would be unchanged. O C. Long-term liabilities would decrease by $19.6 million, and cash would increase by the same amount The book value of equity would be unchanged. O D. Long-term liabilities would increase by $19.6 million, and cash would increase by the same amount. The book value of equity would be unchanged. b. A warehouse fire destroyed $5.2 million worth of uninsured inventory. (Select the best choice below.) O A. Inventory would decrease by $5.2 million, as would the book value of equity. O B. Inventory would increase by $5.2 million, and the book value of equity would decrease by the same amount. OC. Inventory would decrease by $5.2 million, and the book value of equity would be unchanged. O D. Inventory would increase by $5.2 million, as would the book value of equity c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building (Select the best choice below.)

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter21: The Statement Of Cash Flows
Section: Chapter Questions
Problem 16P: Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and...
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Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet would be affected and by how much. Also indicate the change to Global's book value of equity. a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt. b. A warehouse fire destroyed $5.2 million worth of uninsured inventory. c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building. d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment. e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 46%. f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices. a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt.  (Select the best choice below.) b. A warehouse fire destroyed $5.2 million worth of uninsured inventory.  (Select the best choice below.) c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building.  (Select the best choice below.)
Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet
would be affected and by how much. Also indicate the change to Global's book value of equity.
a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt.
b. A warehouse fire destroyed $5.2 million worth of uninsured inventory.
c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building.
d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment.
e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 46%.
f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices.
c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building. (Select the best choice below.)
O A. Long-term assets would increase by $9.3 million, cash would decrease by $4.7 million, and long-term liabilities would increase by $4.6 million. There
would be no change to the book value of equity.
O B. Long-term assets would decrease by $9.3 million, cash would increase by $4.7 million, and long-term liabilities would decrease by $4.6 million. There
would be no change to the book value of equity.
O C. Long-term assets would decrease by $9.3 million, cash would decrease by $4.7 million, and long-term liabilities would increase by $4.6 million. There
would be no change to the book value of equity.
O D. Long-term assets would increase by $9.3 million, cash would increase by $4.7 million, and long-term liabilities would increase by $4.6 million. There
would be no change to the book value of equity.
d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment.
(Select the best choice below.)
O A. Accounts receivable would increase by $2.8 million, as would the book value of equity.
O B. Accounts receivable would decrease by $2.8 million, and the book value of equity would increase by the same amount
unlun of nit unld decrencn hu thncama amaunt
Transcribed Image Text:Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet would be affected and by how much. Also indicate the change to Global's book value of equity. a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt. b. A warehouse fire destroyed $5.2 million worth of uninsured inventory. c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building. d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment. e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 46%. f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices. c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building. (Select the best choice below.) O A. Long-term assets would increase by $9.3 million, cash would decrease by $4.7 million, and long-term liabilities would increase by $4.6 million. There would be no change to the book value of equity. O B. Long-term assets would decrease by $9.3 million, cash would increase by $4.7 million, and long-term liabilities would decrease by $4.6 million. There would be no change to the book value of equity. O C. Long-term assets would decrease by $9.3 million, cash would decrease by $4.7 million, and long-term liabilities would increase by $4.6 million. There would be no change to the book value of equity. O D. Long-term assets would increase by $9.3 million, cash would increase by $4.7 million, and long-term liabilities would increase by $4.6 million. There would be no change to the book value of equity. d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment. (Select the best choice below.) O A. Accounts receivable would increase by $2.8 million, as would the book value of equity. O B. Accounts receivable would decrease by $2.8 million, and the book value of equity would increase by the same amount unlun of nit unld decrencn hu thncama amaunt
Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet
would be affected and by how much. Also indicate the change to Global's book value of equity.
a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt.
b. A warehouse fire destroyed $5.2 million worth of uninsured inventory.
c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building.
d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment.
e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 46%.
f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices.
a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt. (Select the best choice below.)
O A. Long-term liabilities would decrease by $19.6 million, and cash would decrease by the same amount. The book value of equity would change by $19.6.
O B. Long-term liabilities would decrease by $19.6 million, and cash would decrease by the same amount. The book value of equity would be unchanged.
O C. Long-term liabilities would decrease by $19.6 million, and cash would increase by the same amount. The book value of equity would be unchanged.
O D. Long-term liabilities would increase by $19.6 million, and cash would increase by the same amount. The book value of equity would be unchanged.
b. A warehouse fire destroyed $5.2 million worth of uninsured inventory. (Select the best choice below.)
O A. Inventory would decrease by $5.2 million, as would the book value of equity.
O B. Inventory would increase by $5.2 million, and the book value of equity would decrease by the same amount.
O C. Inventory would decrease by $5.2 million, and the book value of equity would be unchanged.
O D. Inventory would increase by $5.2 million, as would the book value of equity.
c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building. (Select the best choice below.)
Transcribed Image Text:Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet would be affected and by how much. Also indicate the change to Global's book value of equity. a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt. b. A warehouse fire destroyed $5.2 million worth of uninsured inventory. c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building. d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment. e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 46%. f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices. a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt. (Select the best choice below.) O A. Long-term liabilities would decrease by $19.6 million, and cash would decrease by the same amount. The book value of equity would change by $19.6. O B. Long-term liabilities would decrease by $19.6 million, and cash would decrease by the same amount. The book value of equity would be unchanged. O C. Long-term liabilities would decrease by $19.6 million, and cash would increase by the same amount. The book value of equity would be unchanged. O D. Long-term liabilities would increase by $19.6 million, and cash would increase by the same amount. The book value of equity would be unchanged. b. A warehouse fire destroyed $5.2 million worth of uninsured inventory. (Select the best choice below.) O A. Inventory would decrease by $5.2 million, as would the book value of equity. O B. Inventory would increase by $5.2 million, and the book value of equity would decrease by the same amount. O C. Inventory would decrease by $5.2 million, and the book value of equity would be unchanged. O D. Inventory would increase by $5.2 million, as would the book value of equity. c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building. (Select the best choice below.)
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