Question

a. Determine the total liabilities at the end of Years 2 and 1. b. Determine the ratio of liabilities to stockholders' equity for Year 2 and Year 1. Rou nd to two decimal places C What conclusions regarding the margin of protection to the creditors can draw from (b)? EX 1-27 Ratio of liabilities to stockholders' equity OBJ. 6 Lowe's Companies Inc, a major competitor of The Home Depot in the home improvement business, operates over 1,700 stores. Lowe's recently reported the following balance s data (in millions): PAI sheet Total assets Total liabilities Year 2Year 1 $33,559 $33,699 7,02615,587 a. Determine the total stockholders' equity at the end of Years 2 and 1. b. Determine the ratio of liabilities to stockholders cquity for Year 2 and Year 1. ou to two decimal places. .What conclusions regarding ihe sik to the creditors can you draw from ()? d. Using the balance sheet data for The Rorme Depot in Exercise 1-26, how does the ratio of liabilities to stockholders' equity oF towe's voropare to that of The Home Depot? ms: Series A OBJ. 4 PR 1-1A Transactions On April 1 of the current year, Andrea Byrd established a business to manage rental property. She completed the following transactions during April: a. Opened a business bank account with a deposit of $45,000 from personal funds. b. Purchased office supplies on account, $2,000. c. Received cash from fees earned for managing rental property, $8,500. d. Paid rent on office and equipment for the month, $5,000. e. Paid creditors on account, $1,375. of f. Billed customers for fees eamed for managing rental property, $11.250. B. Paid automobile expenses (including rental charges) for month, $840, and miscella- neous expenses, $900 h. Paid office salaries, $3,600. i. Determined that the cost of supplies on hand was $550; therefore, the cost of supplies used was $1,450. j. Withdrew cash for personal use, $2,000. Instructions 1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings

Answer 1

a) Total Stockholders Equity = Total Assets -Total Liabilities

	Year 2	Year 1
Total Assets	$   33,559.00	$   33,699.00
Total Liabilties	$ (17,026.00)	$ (15,587.00)
Total Stockholders Equity	$   16,533.00	$   18,112.00

b)

	Year 2	Year 1
Total Liabilties	$ 17,026.00	$   15,587.00
Total Stockholders Equity	$ 16,533.00	$   18,112.00
Ratio	1.03	0.86

c)In Comparison to Year 1 , the company has become more dependant on the creditors for the funds. Its More riskier as Liability has its own cost and increasing dependant on it is not good