accounts – Company X has a leverage of 1.81 This means that:

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1.) Company X has a leverage of 1.81 This means that:
(Assume leverage is calculated as Assets/Equity)
Assets are funded with 81% debt.
Assets are funded with 81% equity.
$1.81 of assets is funded with $1.00 of equity and $0.81 of debt.
$1.81 of assets is funded with $1.00 of debt and $0.81 of equity.

2) Midyear on July 31st, the Taylor Corporation’s balance sheet reported:
Total Assets of $174.344 million
Total Common Stock of $5.080 million
Cash of $8.040 million
Retained Earnings of $39.651 million.
What were the Taylor Corporation’s total liabilities?
$134.693 million.
$129.613 million.
$121.573 million.
$137.653 million.

3) Last year the Brown company increased their equity. In 2012 their equity was $49,954. Last year (2013) it increased
to $54,851. What are causes of change in equity? Select 3
A change in short term debt of-$4,846.
A change in cash of -$2,012.
A bond issue of$1,599.
Profits of $12,756
Dividend payment of$6,353.
Issue and retirement of stock .
A change of plant and equipment of$10,100.
Depreciation of -$38,653
Plant Improvements of $10,100
Change in inventory of-$1,222.
An accounts payable change of$1,906.

4) The Green Company has just purchased $39,660,000 of plant and equipment that has an estimated useful life of 15
years. Suppose at the end of 15 years this plant and equipment can be salvaged for $3,966,000 (1/10th of its original
cost). What will be the book value of this purchase (excluding all other Plant and Equipment) after its first year of use?
Use generally accepted (FASB) accounting principles.
Select: 1
$37,280,400
$35,694,000
$37,016,000
$33,314,400

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