Im having some issues finding Answer for: Problem 12-7A Presented below are the
ID: 2417064 • Letter: I
Question
Im having some issues finding Answer for:
Problem 12-7A Presented below are the financial statements of Kurtzel Company KURTZEL COMPANY Balance Sheets 014 $ 72,030 41,160 57,624 123,480 (65,856) 228,438 2013 41,160 28,812 41,160 160,524 (49,392 222,261 Accounts receivable Property, plant, and equipment Total Liabilities and Stockholders' Equit Accounts payable ncome taxes payable Bonds payable Common stock Retained eanings Total s 39,102 30,870 16,464 67,914 28,812 78,204 14,406 34,986 37,044 102,900 228,438 EL COMPA Income Sales revenue Cost of goods sold Gross profit Selling expenses $498,036 360,150 137,886 $37,044 19,392 88,494 Income from operatios Interest expense Income before income taxes ncome tax expense Net income 82,320 Additional data 1. Depreciation expense was $36,015. 2. Dividends declared and paid were $41,160 3. During the year equipment was sold for $17,493 cash. This equipment cost $37,044 originally and had accumulated depreciation of $19,551 at the time of sale.Explanation / Answer
Answer:
(1)
Current Cash Debt Coverage Ratio = Net Cash Provided by Operating Activities / Average Current Liabilities
Net Cash Provided by Operating Activities = $79,233
Average Current Liabilities
2014
2013
Average
Accounts Payable
$39,102
$30,870
$34,986
Income Tax Payable
$14,406
$16,464
$15,435
$50,421
Current Cash Debt Coverage Ratio = $79,233 / $50,421 = 1.57 times
2)
Cash Debt Coverage = Net Cash Provided by Operating Activities / Average Total Liabilities
Average Total Liabilities
2014
2013
Average
Accounts Payable
$39,102
$30,870
$34,986
Income Tax Payable
$14,406
$16,464
$15,435
Bond Payable
$34,986
$67,914
$51,450
$101,871
Cash Debt Coverage = $79,233 / $101,871 = 0.77 times
(3) --- You already have the answer...
Average Current Liabilities
2014
2013
Average
Accounts Payable
$39,102
$30,870
$34,986
Income Tax Payable
$14,406
$16,464
$15,435
$50,421