1. Rite Aid has considerable debt a portion of which is convertible debt. What would...
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Accounting
1. Rite Aid has considerable debt a portion of which is convertible debt. What would be the impact of the conversion of this debt on the company's balance sheet? individual shareholder?
3.what is the effect of using LIFO vs FIFO on: The inventory carrying value and New Income. How does the use of LIFO contribute to earnings management.
4. How does financial leverage increase non systemic risk and affect long and short term solvency?
5. Estimating bad debts can be done by the percentage of sales method and the aging of accounts receivable method. each method has its drawbacks and advantages. If the company you were reviewing used the percentage of sales method and you noted that the allowance shown on the balance sheet was growing disproportionately to the accounts receivable give possible reasons for the disproportionate growth and suggest a means to adjust this situation if necessary. See example below.
Year Accounts Receivable Allowance Percent of A/R
2014 4,500,000 450,000 10.0%
2015 5,200,000 600,000 11.5%
2016 7,500,000 950,000 12.7%
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