Use the Following Comparative Balance Sheet to Compute Ratios as Requested

Use the following comparative balance sheet to compute ratios as requested.
Buff Company
COMPARATIVE BALANCE SHEET
As of December 31 , Year 1 and Year 2
$\begin{array}{lcc}\text { Assets }&\text { Year } 2&\text { Year } 1\\\text { Current assets }\\\text { Cash } & \$ 10,000 & \$ 5,000 \\\text { Accounts receivable } & 6,000 & 4,000 \\\text { Merchandise inventory } & 20,000 & 15,000\\\text { Total Current assets } & \$ 36,000 & \$ 24,000 \\\text { Property, plant, and equipment } \\\text { Building }& 30,000 & 30,000 \\\text { Liabilities and Shareholders' Equity }\\\text { Current liabilities }\\\text { Advance from customer } & \$ 400 & \$ 500 \\\text { Accounts payable } & 1,000 & 1,000 \\\text { Rent payable } & 2,000 & 1,500 \\\text { Utilities pavable } & 200 & 200\\\text { Salaries payable }&1,000&800\\\text { Total Current liabilities }&\$4,600&\$4,000\\\text { Shareholders' Equity }\\\text { Common stock, } 2,000 \text { shares } & 5,000 & 5,000 \\\text { Additional paid-in capital } & 40,000 & 40,000 \\\text { Retained eamings } & 16.400 & 5,000\\\text { Total Shareholders' equity }&61,400&50,000\\(\text { Total Liabilities and shareholders' equity }&\$66,000&\$54,000\end{array}$
Compute the following ratios at year end for Year 2 for Buff Company:
a. Long-term debt ratio
b. Debt-equity ratio
c. Current ratio
d. Leverage ratio

Assume that a bank loans $\$ 10,000$ cash (due in 5 years) to the company on December 31 , Year 2 . Make the appropriate adjustments to the financial statements and compute the following ratios:
e. Long-term debt ratio
f. Debt-equity ratio
g. Current ratio
h. Leverage ratio