Question

In: Accounting

S Company had the following account balances: Bonds Payable $7,000 CR &n

S Company had the following account balances:

Bonds Payable $7,000 CR

Supplies $7,000 DR

Accounts Receivable $1,000 DR

Accounts Payables $5,000 CR

Building & Land $13,000 DR

Retained Earnings $4,000 DR

Cash $5,000 DR

Discount-Bonds Payable $2,000 DR

If $4,000 of the Accounts Payable were paid using cash, what would be the Debt-to-Equity Ratio taking into account the payment of the Accounts Payable?

(Round to the nearest 3rd decimal place in your answer format)

Expert Solution

All works forms part of the answer
Debt – Equity Ratio = Total Liabilities / Total Equity
Workings

Step 1: Calculate the amount of Total Equity

	Assets
	Cash	$ 5,000.00
	Accounts receivables	$ 1,000.00
	Supplies	$ 7,000.00
	Building & Land	$ 13,000.00
A	Total Assets	$ 26,000.00

	Liabilities
	Accounts Payable	$ 5,000.00
	Bonds Payable, net of discount	$ 5,000.00
B	Total Liabilities	$ 10,000.00

C = A - B	Total Equity (including Retained Earnings)	$ 16,000.00

Step 2: Calculate updated balance after payment of $ 4000 accounts payables

	Accounts Payable	$ 1,000.00
	Bonds Payable, net of discount	$ 5,000.00
A	Total Liabilities	$ 6,000.00

B [already calculated in Step 1]	Total Equity	$ 16,000.00

Answer

A	Total Debts = Total Liabilities	$ 6,000.00
B	Total Equity	$ 16,000.00
C = A/B	Debt to Equity ratio	0.375 times = ANSWER

Answer = 0.375 times = Debt to Equity Ratio

ekkarill92 answered 3 years ago

On December 1, 2017, Prosen Distributing Company had the following account balances. Debit Credit Cash $7,000...

On December 1, 2017, Prosen Distributing Company had the following account balances. Debit Credit Cash $7,000 Accumulated Depreciation—Equipment $2,420 Accounts Receivable 5,500 Accounts Payable 4,900 Inventory 12,400 Salaries and Wages Payable 1,000 Supplies 1,200 Common Stock 30,000 Equipment 24,200 Retained Earnings 11,980 $50,300 $50,300 During December, the company completed the following summary transactions. Dec. 6 Paid $1,550 for salaries and wages due employees, of which $550 is for December and $1,000 is for November salaries and wages payable. 8 Received...

The ledger of a company contained the following account balances on December 31: Accounts Payable $...

The ledger of a company contained the following account balances on December 31: Accounts Payable $ 15,200 Fees Income $ 190,000 Accounts Receivable 6,800 Supplies 5,200 Accumulated Depreciation 10,000 Prepaid Rent 66,000 Cash 92,000 Rent Expense 10,000 Depreciation Expense 10,000 Supplies Expense 9,200 Equipment 80,000 Teresa Davis, Capital 138,400 Teresa Davis, Drawing 58,000 Utilities Expense 16,400 All the accounts have normal balances. Prepare the December 31 closing entries.

The following CR account balances appeared in the balance sheet of Johns Jacks Ltd as at...

The following CR account balances appeared in the balance sheet of Johns Jacks Ltd as at 30 June 2007: $ Paid-up capital (1 000 000 ordinary shares) 1 000 000 Retained profits 350 000 Asset revaluation reserve 600 000 General Reserve 50 000 The following selected transactions took place during the financial year ended 30 June 2007. 1 July: A 1:4 bonus share dividend, valued at $2.00 per share, is declared (using funds from the asset revaluation reserve account) and...

Geo Inc. had the following account balances on January 1, Year 2: Accounts Payable $ 710...

Geo Inc. had the following account balances on January 1, Year 2: Accounts Payable $ 710 Accounts Receivable 1,700 Cash 1,700 Common Stock 15,000 Equipment 1,900 Note Payable 3,200 Retained Earnings 3,786 Salaries and Wages Expense 4,200 Supplies 940 Required: Prepare journal entries for each of the following January activities, and post results to the relevant T-accounts. Compute the ending balance of each T-account. Beginning balances have been entered. (If no entry is required for a transaction/event, select "No Journal...

Geo Inc. had the following account balances on January 1, Year 2: Accounts Payable $ 725...

Geo Inc. had the following account balances on January 1, Year 2: Accounts Payable $ 725 Accounts Receivable 2,200 Cash 2,200 Common Stock 20,000 Equipment 2,900 Note Payable 4,200 Retained Earnings 4,411 Salaries and Wages Expense 4,700 Supplies 1,540 Required: Prepare journal entries for each of the following January activities, and post results to the relevant T-accounts. Compute the ending balance of each T-account. Beginning balances have been entered. (If no entry is required for a transaction/event, select "No Journal...

1.) Bonds payable is a(n) _________________ account. Multiple Choice: Choose one of the following listed below...

1.) Bonds payable is a(n) _________________ account. Multiple Choice: Choose one of the following listed below Asset, Liability, Equity, Revenue, Expense 2.) Discount on Bonds Payable is a(n) _________________ account. Multiple Choice Asset, Liability, Equity, Revenue, Expense 3.) Common Stock is a(n) _________________ account. Multiple Choice Asset, Liability, Equity, Revenue, Expense 4.) Dividends is a(n) _________________ account. Multiple Choice Asset, Liability, Equity, Revenue, Expense 5.) Premium on Bonds Payable is a(n) _________________ account. Multiple Choice Asset, Liability, Equity, Revenue, Expense...

At 12/31/16, ABC Company had the following balances: &n

At 12/31/16, ABC Company had the following balances: DebitCredit Accounts Receivable$182,000 Allowance for Doubtful Accounts $16,500 During 2017 the following transactions occurred: Accounts receivable of $138,000 were collected, including accounts of $60,000 on which 2% of sales discounts was allowed. The company uses the gross method to record sales made on credit. Several customers notified ABC of bankruptcy, and ABC wrote off the accounts in the amount of $17,500. ABC received $5,300 in payment for an account previously...

At December 31, 2017, Hyasaki Corporation has the following account balances: Bonds payable, due January 1,...

At December 31, 2017, Hyasaki Corporation has the following account balances: Bonds payable, due January 1, 2026 $2000000 Discount on bonds payable 88000 Interest payable 80000 Show how the above accounts should be presented on the December 31, 2017, balance sheet, including the proper classifications.

On December 1, 2017, Rodriguez Distributing Company had the following account balances.

Comprehensive Problem 5 On December 1, 2017, Rodriguez Distributing Company had the following account balances. During December, the company completed the following summary transactions. Dec. 6 Paid $ 1,500 for salaries and wages due employees, of which $ 500 is for December and $ 1,000 is for November salaries and wages payable. 8 Received $ 1,800 cash from customers in payment of account (no discount allowed). 10 Sold merchandise for cash $ 6,500. The cost of the merchandise sold was...

Janson Corporation Co.'s trial balance included the following account balances at December 31, 2018: Accounts payable...

Janson Corporation Co.'s trial balance included the following account balances at December 31, 2018: Accounts payable $25,600 Bond payable, due 2027 24,200 Salaries payable 17,700 Note payable, due 2019 20,100 Note payable, due 2023 41,300 What amount should be included in the current liabilities section of Janson's December 31, 2018, balance sheet? Janson Corporation Co.'s trial balance included the following account balances at December 31, 2018: Accounts payable $25,600 Bond payable, due 2027 24,200 Salaries payable 17,700 Note payable, due...