Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following balances are from the records of Ashdash Company at December 3 1 , Year 1 : Cash $ 2 , 0 0 0

The following balances are from the records of Ashdash Company at December 31, Year 1:
Cash $2,000,000
Accounts receivables (net)5,000,000
Trading securities 600,000
Inventories 1,500,000
Property, plant, and equipment (net of depreciation)2,500,000
Goodwill 200,000
Accounts payable 2,000,000
Current maturities of noncurrent debt 100,000
Noncurrent debt 1,000,000
Common stock 600,000
Additional paid-in capital 8,000,000
Select from the option list provided the appropriate effect that the transaction had on each ratio or measurement. Assume each event is independent of the others. Each choice may be used once, more than once, or not at all.
Year 2 transaction
Quick ratio
Working capital
Debt-to-equity ratio
1. Accounts receivable were collected.
2. Inventories were purchased on credit.
3. Half the current maturities of noncurrent debt were retired on December 31, Year 2.
4. An unusual in nature event caused $250,000 worth of damage to the company's main building. Repairs were made by year-end and were paid for using a combination of cash and credit.
5. An executive exercised share options that had been granted as compensation and had vested in prior years. The market price was significantly higher at the date of exercise than at the date of grant.

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

Cost Accounting With Integrated Data Analytics

Authors: Karen Congo Farmer, Amy Fredin

1st Edition

1119731860, 9781119731863

More Books

Students also viewed these Accounting questions

Question

=+ What characters could become part of everyday culture?

Answered: 1 week ago

Question

=+1. Work in teams of four or five.

Answered: 1 week ago

Question

=+5. Now write the same commercial as a 15-second spot. Think about

Answered: 1 week ago