The following balances were taken from the December 31, 2014, balance sheet of Time Warner (dollars in

Question:

The following balances were taken from the December 31, 2014, of Time Warner (dollars in millions):
Current assets .................................$13,180
Long-term assets ..............................50,079
Current liabilities ................................9,204
Long-term liabilities .........................29,579
Shareholders€™ equity ........................24,476
Early in 2015, Time Warner considered the financial effects of several events.

REQUIRED:
For each of the five events listed here, indicate how they would affect the financial ratios listed by completing the following chart. Assume that financial statements are prepared immediately after each event. Treat each event independently, and use the following key: increase (+), decrease (ˆ’), and no effect (NE). Current Assets Current Liabilities Net Income Total Assets 1. Purchase equipment in exchange for a note payable. 2. Pay

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