Q6. Selected information from Ingot Company’s financial statements for the year ended December 31, 2004, was as follows prior to the consideration of its impaired asset write-down (in $): Cash | 120,000 | < > td> | Accounts Payable | 290,000 | Accounts Receivable | 200,000 | < > td> | Long-term Debt | 740,000 | Inventory | 300,000 | < > td> | Common Stock | 800,000 | Property Plant & Eq. (net) | 1,700,000 | < > td> | Retained Earnings | 490,000 |
| 2,320,000 | < > td> |
| 2,320,000 |
Ingot Company’s excavation machine is permanently impaired. Its purchase price was $1,600,000 and its accumulated depreciation was $800,000 through 2004. The present value of its future cash flows is $500,000. The write-down of the excavation machine will cause Ingot’s total debt ratio (total debt-to-total capital) to: A) decrease from 0.44 to 0.40. B) increase from 0.44 to 0.51. C) increase from 0.44 to 0.48.
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发表于 2009-1-19 10:20
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