The accounting records of Brillhart Foods, Inc., include the following items at December 31, 2016:

Requirements
1. Show how each relevant item would be reported on the Brillhart Foods, Inc., classified balance sheet, including headings and totals for current liabilities and long-term liabilities.
2. Answer the following questions about Brillhart Food's financial position at December 31, 2016:
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 Brillhart Foods cover its interest expense during 2016?
4. Assume that all of the existing liabilities are included in the information provided. Calculate the leverage ratio and debt ratio of the company. Use year-end figures in place of averages where needed for the purpose of calculating ratios in this problem. 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), assume that Footnote 8 of the financial statements includes commitments for long-term operating leases over the next 15 years in the amount of $3,800,000. If the company had to capitalize these leases in 2016, how would it change the leverage ratio and the debt ratio? How would this impact your assessment of the company's health from a leverage point of view?

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Mortgage note payable, Total assets... $4,600,000 S 98,000 Accumulated depreciation, Projected pension 168,000 equipment Discount on bonds payable benefit obligation. Bonds payable, long-te Mortgage note payable, 470,000 300,000 21,000 390,000 745,000 (all lon g-ter).. Operating income long-term .312,000 Equipment. Bonds payable, current portion Interest expense. 200,000 Pension plan assets 223,000 (market value.. Interest payable. 420,000 75,000