Consider the following potential events that might have occurred to Global on December​ 30, 2016. For each​ one, indicate which line items in​ Global's balance sheet would be affected and by how much. Also indicate the change to​ Global's book value of equity. a. Global used $ 19.6 million of its available cash to repay $ 19.6 million of its​ long-term debt. b. A warehouse fire destroyed $ 4.8 million worth of uninsured inventory. c. Global used $ 4.8 million in cash and $ 4.6 million in new​ long-term debt to purchase a $ 9.4 million building. d. A large customer owing $ 3.1 million for products it already received declared​ bankruptcy, leaving no possibility that Global would ever receive payment. e. ​Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 51 %. f. A key competitor announces a radical new pricing policy that will drastically undercut​ Global's prices.

Respuesta :

Answer:

Explanation:

a. Both debt on Long term liability side and cash on assets side will decrease by $19.6 million each. Book value of equity will not change.

b. inventory on assets side will decline by $4.8 million and book value of equity will also decline by the same amount.

c. building on long term assets side will increase by $9.4 million , while cash will decrease by $4.8million on assets side and debt will increase by $4.6million on liabilities side. Book value of equity should not change.

d. Account receivables and book value of equity reduces by $3.1 million for both lines.

e. no effect

f. no effect