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stich3 [128]
3 years ago
11

On Monday PBC (Peanut Butter & Chocolate) Candy Company’s entire balance sheet comprised real assets of $500 million and cas

h of $50 million. It had no debt (nor preferred shares). On Tuesday PBS established a line of credit for $100 million with BBB (Big Bad Bank). On Wednesday morning PBC drew down $20 million from its credit line and kept it in cash for later use. Which of the following is correct regarding PBC Wednesday afternoon? a) Debt of $100 million and assets of $550 million b) Debt of $100 million and assets of $650 million c) Debt of $20 million and assets of $570 million d) Debt of $20 million and assets of $650 million e) Debt of $20 million and assets of $630 million
Business
1 answer:
zimovet [89]3 years ago
8 0

Answer:

c) Debt of $20 million and assets of $570 million

Explanation:

Line of credit increases liability in a company's Balance sheet only when it is used. Thus, PBC (Peanut Butter & Chocolate) Company will have debt of $20 Million and Assets of $570 Million

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Answer:

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3 years ago
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Katena32 [7]
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