Accounts payable $ 519 comma 000$519,000 Notes payable $ 255 comma 000$255,000 C
ID: 2809725 • Letter: A
Question
Accounts payable
$ 519 comma 000$519,000
Notes payable
$ 255 comma 000$255,000
Current liabilities
$ 774 comma 000$774,000
Long-term debt
$ 1 comma 291 comma 000$1,291,000
Common equity
$ 5 comma 324 comma 000$5,324,000
Total liabilities and equity
.What percentage of the firm's assets does the firm finance using debt (liabilities)?
b.If Campbell were to purchase a new warehouse for
$ 1.2$1.2
million and finance it entirely with long-term debt, what would be the firm's new debt ratio?
a.What percentage of the firm's assets does the firm finance using debt (liabilities)?
The fraction of the firm's assets that the firm finances using debt is
nothing%.
(Round to one decimal place.)
$ 7 comma 389 comma 000$7,389,000
Accounts payable
$ 519 comma 000$519,000
Notes payable
$ 255 comma 000$255,000
Current liabilities
$ 774 comma 000$774,000
Long-term debt
$ 1 comma 291 comma 000$1,291,000
Common equity
$ 5 comma 324 comma 000$5,324,000
Total liabilities and equity
.What percentage of the firm's assets does the firm finance using debt (liabilities)?
b.If Campbell were to purchase a new warehouse for
$ 1.2$1.2
million and finance it entirely with long-term debt, what would be the firm's new debt ratio?
a.What percentage of the firm's assets does the firm finance using debt (liabilities)?
The fraction of the firm's assets that the firm finances using debt is
nothing%.
(Round to one decimal place.)
$ 7 comma 389 comma 000$7,389,000
Explanation / Answer
Total assets = Current liabilities+ Long-term debt+ Common equity
= 774,000+ 1,291,000 + 5,324,000
=7,389,000
Total liabilities = Current liabilities+ Long-term debt
= 774,000+ 1,291,000
= 2065000
Percentage of the firm's assets financed using debt (liabilities)= Total liabilities / Assets
=2065000/ 7,389,000
= 27.95%
rounded to 28%
B: Total assets = Earlier assets + new warehouse
= 7,389,000+ 1,200,000
=8589000
Total debt = Earlier debt+ New debt
= 2065000+ 1,200,000
= 3265000
New debt ratio= Total liabilities / Assets
=3265000 /8589000
=38.01%