Consider the following potential events that might have occurred to Global Conglomerate on December$30,2022.$ For each$$ one, indicate which line items in Global$\text{'}$s balance sheet would be affected and by how much. Also indicate the change to Global$\text{'}$s book value of equity.$($In all$$ cases, ignore any tax consequences for$$ simplicity.$)$

a$.$ Global used $$$$19$ million of its available cash to repay $$$$19$ million of its$$ long$-$term debt.

b$.$ A warehouse fire destroyed $$$$7$ million worth of uninsured inventory.$$

c$.$ Global used $$$$3$ million in cash and $$$$3$ million in new$$ long$-$term debt to purchase a $$$$6$ million building.$$

d$.$ A large customer owing $$$$2$ million for products it already received declared$$ bankruptcy, leaving no possibility that Global would ever receive payment.

e$.$ Global$\text{'}$s engineers discover a new manufacturing process that will cut the cost of its flagship product by over $60\%.$

f$.$ A key competitor announces a radical new pricing policy that will drastically undercut Global$\text{'}$s prices.

Question content area bottom

Part $1$

a$.$ Global used $$$$19$ million of its available cash to repay $$$$19$ million of its$$ long$-$term debt.$$

$$Long$-$term liabilities would

$$

decrease

increase

by $$$

$$

enter your response here $$million$,$ and cash would

$$

decrease

increase

by the same amount. The book value of equity would be

$$

unchanged

higher

lower

$.($Select from the$$ drop$-$down menus and round to the nearest$$ integer.$)$

Part $2$

b$.$ A warehouse fire destroyed $$$$7$ million worth of uninsured inventory.

Inventory would

$$

decrease

increase

by $$$

$$

enter your response here $$million$,$ as would the book value of equity. $($Select from the$$ drop$-$down menus and round to the nearest$$ integer.$)$

Part $3$

c$.$ Global used $$$$3$ million in cash and $$$$3$ million in new$$ long$-$term debt to purchase a $$$$6$ million building.

$$Long$-$term assets would

$$

increase

decrease

by $$$

$$

enter your response here $$million$,$ cash would

$$

decrease

increase

by $$$

$$

enter your response here $$million$,$ and$$ long$-$term liabilities would

$$

decrease

increase

by $$$

$$

enter your response here million. There would be no change to the book value of equity.$($Select from the$$ drop$-$down menus and round to the nearest$$ integer.$)$

Part $4$

d$.$ A large customer owing $$$$2$ million for products it already received declared$$ bankruptcy, leaving no possibility that Global would ever receive payment.$$

$$

Accounts payable

Accounts receivable

would

$$

increase

decrease

by $$$

$$

enter your response here $$million$,$ as would the book value of equity.$($Select from the$$ drop$-$down menus and round to the nearest$$ integer.$)$

Part $5$

e$.$ Global$\text{'}$s engineers discover a new manufacturing process that will cut the cost of its flagship product by over $60\%.($Select the best choice$$ below.$)$

A$.$

This event would increase the book value of equity by $60\%.$

B$.$

This event would increase accounts receivable by $60\%.$

C$.$

This event would not affect the balance sheet.

D$.$

This event would decrease inventory by $60\%.$

Part $6$

f$.$ A key competitor announces a radical new pricing policy that will drastically undercut Global$\text{'}$s prices. $($Select the best choice$$ below.$)$

A$.$

This event would increase accounts payable by the same percentage.

B$.$

This event would decrease accounts receivable by the same percentage.

C$.$

This event would decrease cash by the same percentage.

D$.$

This event would not affect the balance sheet.

Long$-$term liabilities wouldby $by $million, and cash wouldmillion, and cash wouldby the same amount.The book value of equity would be$($Select from the drop$-$down menus and round to the nearest integer.$)$Inventory wouldby $by $$($Select from the drop$-$down menus and round to the nearest integer.$)$Long$-$term assets wouldby $by $million, cash wouldmillion, cash wouldby $by $million, and long$-$term liabilities wouldmillion, and long$-$term liabilities wouldby $by $$($Select from the drop$-$down menus and round to the nearest integer.$)$A large customer owing $$2$ million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment.wouldwouldby $by $$($Select from the drop$-$down menus and round to the nearest integer.$)))$