Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

hello need help with according homework Exercise 16-36Debt Ratio, Debt-to-Equity Ratio Busch Companys balance sheet shows total liabilities of $510,900, total equity of $126,000, and

hello need help with according homework

Exercise 16-36Debt Ratio, Debt-to-Equity Ratio

Busch Companys balance sheet shows total liabilities of $510,900, total equity of $126,000, and total assets of $636,900.

Required:

Note:Round answers to two decimal places.

  • 1.Calculate the debt ratio.
  • 2.Calculate the debt-to-equity ratio.
  • 3.CONCEPTUAL CONNECTIONBased on the ratios calculated in Requirements 1 and 2, comment on the riskiness of Buschs financing decisions.

Use the following information for Exercises 16-37 through 16-39:

Juroe Company provided the following income statement for last year:

Sales

$11,300,000

Cost of goods sold

3,000,000

Gross margin

$ 8,300,000

Operating expenses

3,800,000

Operating income

$ 4,500,000

Interest expense

1,000,000

Income before taxes

$ 3,500,000

Income taxes

1,400,000

Net income

$ 2,100,000

Juroes balance sheet as of December 31 last year showed total liabilities of $10,250,000, total equity of $6,150,000, and total assets of $16,400,000.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Payroll Accounting 2018

Authors: Jeanette Landin, Paulette Schirmer

4th edition

1260005127, 1259742514, 1260005165, 126000516X, 978-1259742514

More Books

Students also viewed these Accounting questions

Question

1. To gain knowledge about the way information is stored in memory.

Answered: 1 week ago