If the Pro Forma Balance Sheet Shows That Total Assets

question 6

Multiple Choice

If the pro forma balance sheet shows that total assets must increase by $400,000 while retaining a debt-equity ratio of .75 then:

• A) debt must increase by $300,000.
• B) equity must increase by the full $400,000.
• C) debt must increase by $171,429.
• D) equity must increase by $100,000.

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Definitions:

Negotiable Bill of Lading

A document issued by a carrier that guarantees the delivery of goods to a specified party and can be transferred by endorsement to others.

Seller's Bank

A financial institution that represents the seller in a transaction, particularly in international trade, by handling the receipt and processing of payment.

Agent for Collection

An individual or entity appointed to gather or receive payments on behalf of another.

Tender Delivery

The process of submitting goods for acceptance under the terms of a contract, specifically in a manner that conforms to the agreement's requirements.