Exercise 8 -1 Exercise 8-2 Exercise 8-3 Exercise 8-4

1.) Liability 0 CL A
2.) one operating cycle 1 NCL A
3.) Notes payable 1 NCL C
4.)Discount on Notes Payable 1 CL D
5.) Long-term 1 CL A
6.) premium and coupons 0 CL D
7.) Provisions 0 CL C

8.)sum of money at a
designated maturity
date,periodic interest at a
specified rate on the face value. 0 NCL C
9.) Term 1 NCL D
10.) premium, discount 0 CL C
Exercise 8-5
1. Current Liabilities 1398000
2. Accounts Payable 1530000
3. Unearned Income 833333
4. Premiums 45000
5. Warranties cost 60000
6. Notes Payable 90000
7. Present Value 7593375
Discount on notes 2406625
8 This amount is reasonably possbile but not probable,
9. issue price of bonds 3405000
carrying value of bonds 3345000
10. Interest Expense 500000
Bonds payable 4745000
11. Total Liabilities 2192900
12. Working Capital 1600000
Current Ratio 2.33
Is the company liquid, able to pay current maturing obligations? yes base on the current ratio the company is liquid en
Debt to total Asset 35%
Times interest earned ratio 4.6
Is the company solvent? Yes, base on the debt to total ratio and times interest
nably possbile but not probable, so it should be disclosed but not accrued

ent ratio the company is liquid enough and can pay the current maturing obligations

t to total ratio and times interest earned ratio the company so solvent enough to pay off the company's interest and principal on long-term
rest and principal on long-term debt