Graduate Essay Writers
Only the finest writers are selected to be a part of our team, with each possessing specialized knowledge in specific subjects and a background in academic writing..
Order for this Paper or similar Assignment Help Service
Fill the order form in 3 easy steps - Less than 5 mins.
Posted: February 28th, 2022
accounting discussion 6
Jim Tennison, L & B Corporation’s president, called the company’s chief financial officer, Fred Harden, into his office late Friday afternoon. Jim had been reviewing the projected financial statements of L & B Corporation that would be issued as of year-end. Jim told Fred he was worried that the company’s liquidity position had been declining over the past two years. Fred assured Jim that the company still had sufficient liquidity, and it had been steadily decreasing its debt. Jim said that there were three or four major stockholders who were very conservative and would raise lots of questions about the company’s declining liquidity ratios. Jim and Fred then decided to take out a two-year loan secured by some land L & B Corporation owned, put the cash in the bank, and pay the loan off after January 1.
Jim told Fred to account for the transaction as a long-term liability for financial reporting purposes. They agreed that this measure would solve the problem of liquidity at the annual stockholders’ meeting because the company’s ratios would be almost identical to last year. Jim was sure that most of the stockholders were only concerned with net income and ratios.
If you were a stockholder of L&B Corporation, how would you feel about Jum and Fred’s idea? Have any ethical principles been violated?
If the transaction is booked as a debit to Cash and a credit to long-term Notes Payable, how will it affect the company’s key current ratios and debt ratios?
Suppose Jim and Fred decide not to take out the loan. Write a brief note to the stockholders justifying a decrease in liquidity measures. Assure them that the company is still in the “safe range”.
List as many reasons as reasons as possible, both positive and negative, for a decrease in net working capital.
Why Seek Our Custom Writing Services
Every Student Wants Quality and That’s What We Deliver
Affordable Prices
We balance affordability with exceptional writing standards by offering student-friendly prices that are competitive and reasonable compared to other writing services.
100% Plagiarism-Free
We write all our papers from scratch thus 0% similarity index. We scan every final draft before submitting it to a customer.
How it works
When you opt to place an order with Nursing StudyBay, here is what happens:
Expert paper writers are just a few clicks away
Place an order in 3 easy steps. Takes less than 5 mins.