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Which one of the following statements is correct? Select one: a. If the total debt ratio is greater than .50, then the debt-equi

gulaghasi [49]

Answer:

Option E is correct

An increase in the depreciation expense will not affect the cash coverage ratio.

Explanation:

Option E is correct

An increase in the depreciation expense will not affect the cash coverage ratio.

Cash coverage ratio tells us if firm is capable of paying its current liabilities with the cash or cash equivalent. It can not allow other assets to be used for paying the current liabilities.

Formula for Cash Coverage ratio:

Cash Ratio= $\frac{Cash+\ Cash\ Equivalent}{Total\ current\ liabilities}$

So, Cash coverage ratio is independent of expenses whether it is a depreciation or some other expense.

6 0

3 years ago

In the month of March, the Baldwin Corporation received and delivered orders of 138,000 units at a price of $15.00 for revenue o

PIT_PIT [208]

Answer:

$0 in March; 2.07 mil in May

Explanation:

At the end of March, Baldwin corporation would have accounted the entire sales as they follow accrual system of accounting. Since the company offers 30 day credit period, its assumed all sales are on credit. The consolidated entry would be

Debtors accounts Debit $ 2,070,000

Sales account credit $ 2,070,000

As per the information provided, the company has received $2.07 million by the end of may. Since there is a credit period of 30 days, its assumed that no payment has been received in March and hence nothing should be shown in March. Its a post balance sheet event that does not have any impact as on March.

By the end of may, the company received the entire payment and hence in the income statement of May, the entire $2.07 million should be shown. Collection entry should be passed which will remove the debtors , however will not impact the profit / loss.

8 0

4 years ago

The following events occur for The Underwood Corporation during 2015 and 2016, its first two years of operations.

Montano1993 [528]

Answer:

Explanation:

12-June

Dr Accounts revenue $40,400

Cr Service revenue $40,400

17- September

Dr Cash $24,500

Cr Accounts receivable $24,500

31- December

Dr Bad debt expense $7,155 [(40,400-24,500)*45%]

Cr Allowance for uncollectible accounts $7,155

4- March

Dr Accounts receivable $55,400

Cr Service revenue $55,400

20- May

Dr Cash $10,000

Cr Accounts receivable $10,000

2- July

Dr Allowance for uncollectible accounts $5900

Cr Accounts receivable [40400-24,500-10,000] $5,900

19- Oct

Dr Cash $44,500

Cr Accounts receivable $44,500

31- Dec

Dr Bad debts expense $3,650

Cr Allowance for uncollectible accounts[(55,400-44,500)*45%-1255] 3,650

3.

2015:

total accounts receivable 15,900

allowance for uncollectible accounts 7,155

net realizable value 8745 [15,900-7,155]

2016:

total accounts receivable 10,900

allowance for uncollectible accounts 4,905

net realizable value 5995 [10,900-4,905]

8 0

3 years ago

Someone criticizes the government for increasing interest rates but approving the increase in government spending. They are crit

yarga [219]

When a pressure group criticizes a government for increasing interest rate but praise them for increase in government spending, then, they are criticizing the government’s fiscal policy and praising the government monetary policy.

<h3>What is a fiscal and monetary policy?</h3>

Basically, a fiscal policy means the method of using a spending and tax policies to influence economic conditions while monetary policy means the general control of the quantity of money available in an economy

In conclusion, whan a pressure group criticizes a government for increasing interest rate but praise them for increase in government spending, then, they are criticizing the government’s <u>fiscal policy</u> and praising the government <u>monetary policy</u>.