Using the following balance sheet and income statement data what is the debt to

Using the following balance sheet and income

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94.Using the following balance sheet and income statement data, what is the debt toassets ratio?Current assets$ 21,000Net income$ 45,000Current liabilities12,000Stockholders’ equity63,000Average assets132,000Total liabilities27,000Total assets90,000Average common shares outstanding was 15,000. a.20.5 percentb.30 percentc.33.3 percentd.40.9 percentAns: B, LO: 2, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC:Problem Solving, IMA: Business EconomicsSolution: $27,000 $90,000 =30% (Tot. liab. ÷ Tot. assets) 95.The debt to assets ratio is computed by dividing 96.A useful measure of solvency(ability of the company to its operation for the longerperiod of time)is the FOR INSTRUCTOR USE ONLY
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2-31 A Further Look at Financial Statements 97 . Which of the following is not considered a measure of liquidity? 98 . Which measure would a long-term creditor be least interested in reviewing? a.Free cash flowb.Debt to assets ratioc.Current ratiod.Solvency measureAns: C, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: None, IMA:Business Economics 99.Bathlinks Corporation has a debt to assets ratio of 73%. This tells the user ofBathlinks’s financial statements that FOR INSTRUCTOR USE ONLY
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2-32 Test Bank for Survey of Accounting , First Edition 100 . Ace Company is a retail store. Due to competition, it is having trouble selling its products. Thus, inventory has been building up. Ace’s current ratio has not changed for the past
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  • Fall '20
  • Erin egeland
  • Balance Sheet, Generally Accepted Accounting Principles

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