Question
3.Refer to FNM's last publically reported Balance Sheet before it was placed into Conservatorship: FNM Balance Sheet (000 UON) Accrual PERIOD ENDING 6/30/08 Accounting Total
3.Refer to FNM's last publically reported Balance Sheet before it was placed into Conservatorship:
FNM Balance Sheet (000 UON) | Accrual |
PERIOD ENDING 6/30/08 | Accounting |
Total Current Assets | 62,485,000 |
Mortgages | 774,145,000 |
Property Plant and Equipment | 5,995,000 |
Other Assets | 22,689,000 |
Deferred Tax Assets | 20,604,000 |
Total Assets | 885,918,000 |
Current Liabilities | |
Accounts Payable | 6,309,000 |
Short/Current Long Term Debt | 240,666,000 |
Total Current Liabilities | 246,975,000 |
Long Term Debt | 577,432,000 |
Other Liabilities | 20,285,000 |
Total Liabilities | 844,692,000 |
Total Stockholder Equity | 41,226,000 |
Total Liabilities + Equity | 885,918,000 |
If you believed that FNM's mortgage assets, as reported, were inflated by 70,000,000K, what journal entries would you use to correct this error? Choose all the correct entries.
a) dr Mortgage Write Down Expense 70,000,000
b) dr Short/Current Long Term Debt 70,000,000
c) cr Cash 70,000,000
d) cr Total Assets 70,000,000
e) dr Mortgages 70,000,000
f) cr Mortgage Write Down Expense 70,000,000
g) cr Mortgages 70,000,000
4.Refer to the information provided in Question 3 above. After you have corrected the value of FNM's mortgage assets, what is the value of the firm's equity?
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