The amount of the PBO at December 31, 2021, was $333800
<u>Explanation:</u>
The amount of PBO at december 31st is calculated as follows:
PBO on jan 1, 2021 = $268000
add: Service cost = $86000
add: interest = $26800
less: pension benefits that have been paid = $47000
now, we have to solve the above calculation
we get, PBO at dev 31 = $333800
Note: interest is calculated by multiplying the PBO amount on Jan 1,2021 with the rate of interest given.
Thus, $268000 multiply 10% = $26800
Answer:
The gain that Sheridan should recognize on this exchange is $135000
Explanation:
Where Exchange Transaction lacks commercial substance, the asset that is acquired is measured at the <em>Carrying Amount or Undepreciated Cost </em> of the asset given up.
The gain will then include an <em>further consideration acquired</em> on the exchange of an asset.
<u>Entries to record the exchange are as follows :</u>
Cash $135000 (debit)
New Asset at undepreciated cost $420300 (debit)
Cost of Old asset given up $420300 (credit)
Gain on exchange $135000 (credit)
Conclusion :
The gain that Sheridan should recognize on this exchange is $135000
Answer:
(a) 62%
(b) 3.83 times
(c) Yes
Explanation:
(a) Ellie's debt ratio:
= Total Debt ÷ Total assets
= $39 million ÷ $63 million
= 0.62 or 62%
(b) Ellie's times interest earned ratio:
= Interest ÷ EBIT
= $23 million ÷ $6 million
= 3.83 times
(c) Yes, it has enough times interest ratio.
If Interest expenses increased to $7 Million, then
Company could easily raise more debt to finance additional funding needs.