Financial Accounting (12th Edition) (What's New in Accounting)

12th Edition

ISBN: 9780134725987

Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

Publisher: PEARSON

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Textbook Question

Chapter 9, Problem 9.22AE

LO 4, 5

(Learning Objectives 4, 5: Analyze current and long-term liabilities; evaluate debt-paying ability) EnviroFriend Structures. Inc., builds environmentally sensitive structures. The company’s 2018 revenues totaled $2.780 million. At December 31, 2018, and 2017, the company had, respectively, $656 million and $591 million in current assets. The company’s balance sheets and income statements reported the following amounts;

Chapter 9, Problem 9.22AE, LO 4, 5 (Learning Objectives 4, 5: Analyze current and long-term liabilities; evaluate debt-paying

Requirements

1. Describe each of EnviroFriend’s long-term liabilities and state how the liability arose.

2. What were the company’s total assets at December 31, 2018? Evaluate the company’s leverage and debt ratios at the end of 2017 and 2018. Use year-end figures in place of average where needed for calculating the ratios in this exercise. Did the company improve, deteriorate, or remain about the same over the year?

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Chapter 9, Problem 9.21AE

Chapter 9, Problem 9.23AE

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(Learning Objective 6: Analyze and evaluate liquidity and debt-paying ability) LO 6McClain Company’s condensed and adapted balance sheet at December 31, 2018, follows:(In millions)Total current assets....................................................... $15.9Property, plant, equipment, and other assets................. 16.2$32.1Total current liabilities.................................................. $ 9.6Total long-term liabilities.............................................. 5.5Total shareholders’ equity............................................. 17.0$32.1Assume that during the first quarter of the following year, 2019, McClain completed the following transactions:a. Earned revenue of $2.8 million, on account.b. Borrowed $7.0 million in long-term debt.c. Paid half of the current liabilities.d. Paid selling expense of $0.6 million.e. Accrued general expense of $0.8 million. Credit General Expense Payable, a currentliability.f. Purchased equipment for $4.6 million, paying cash…

Chapter 9 Solutions

Financial Accounting (12th Edition) (What's New in Accounting)

Ch. 9 - Brownlee Company issued 525,000, 8%, six-year...Ch. 9 - A bond with a face value of 250,000 and a quoted...Ch. 9 - Mission Furniture issued 500,000 in bonds payable...Ch. 9 - Bonds with an 8% stated interest rate were issued...Ch. 9 - Brimfest Corporation issued 2,400,000, 10-year, 6%...Ch. 9 - The Discount on Bonds Payable account a.is an...Ch. 9 - The discount on a bond payable becomes...Ch. 9 - The carrying value of Bonds Payable equals a.Bonds...Ch. 9 - Prob. 9QC Ch. 9 - Prob. 10QC

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Solution Summary: The author explains the long-term liabilities of Incorporation E and state the way liabilities arose.

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Chapter 9 Solutions