Balance sheet disclosure of liabilities (Learning Objective 6) 15–20 min.

At December 31, 2014, Dior Drapes owes $53,000 on accounts payable, plus salaries payable of $15,000 and income tax payable of $10,000. Dior Drapes also has

$230,000 of notes payable that requires payment of a $45,000 installment in 2015 and the remainder in later years. The notes payable also requires an interest payment of $6,000 on January 1, 2015. Report Dior Drapes’ liabilities on its December 31, 2014, classified balance sheet.

E9-26A. Debt ratio and interest coverage ratio (Learning Objective 7) 5–10 min.

Dabbani Corporation had the following balances as of December 31, 2013:

Cash....................................................................................................................

Accounts Receivable ...........................................................................................

Inventories ..........................................................................................................

Net Plant and Equipment.....................................................................................

Total Current Liabilities .......................................................................................

Long-Term Bonds...............................................................................................

Interest Expense .................................................................................................

Earnings Before Interest and Taxes.....................................................................

$ 10,000 375,000 615,000 1,000,000 310,000 754,000 88,000 440,000 Requirement 1. Calculate Dabbani Corporation’s debt ratio as of December 31, 2013.

2. Calculate Dabbani Corporation’s interest coverage ratio for 2013.

AppendixLO1