The accounting records of Brighton Foods, Inc., include the following items at December 31, 2012:

Requirements
1. Show how each relevant item would be reported on the Brighton Foods, Inc., classified balance sheet, including headings and totals for current liabilities and long-term liabilities.
2. Answer the following questions about Brighton’s financial position at December 31, 2012:
a. What is the carrying amount of the bonds payable (combine the current and long-term amounts)?
b. Why is the interest-payable amount so much less than the amount of interest expense?
3. How many times did Brighton cover its interest expense during 2012?
4. Assume that all of the existing liabilities are included in the information provided. Calculate the leverage ratio and debt ratio of the company. Evaluate the health of the company from a leverage point of view. What other information would be helpful in making your evaluation?
5. Independent of your answer to (4), assumes that Footnote 8 of the financial statements includes commitments for operating leases over the next 15 years in the amount of $3,000,000. If the company had to capitalize these leases in 2012, how would it change the leverage ratio and the debt ratio? How would this change impact your assessment of the company’s health from a leverage point ofview?

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Mortgage note payable, Total assets Accumulated depreciation, $4,500,000 current portion S 92,000 Accumulated pension equipment 166,000 benefit obligation Bonds payable, long-term Mortgage note payable, 450,000 Discount on bonds payable 25,000 Operating income....370,000 744,000 (all long-term) Payable, 200 g-term 318,000 Equip Bonds payable, current portion Interest expense 500,000 Pension plan assets (market value. 229,000 420,000 75,000 Interest payable