Garland Company Balance Sheet Cash and marketable securities Accounts receivable

ID: 2655982 • Letter: G

Question

Garland Company Balance Sheet Cash and marketable securities Accounts receivable $500,000 1,350,000 50,000 Prepaid expenses Total current assets Fixed assets $2,700,000 5,000,000 Less: accum, depr. (2,000,000) Net fixed assets Total assets $3,000,000 $5,700,000 Accounts payable Notes payable Accrued taxes Total current liabilities Long-term debt Owner's equity Total liabilities and owner's equity $400,000 75,000 $1,375,000 1,200,000 3,125,000 $5,700,000 ORN Net sales (all credit) $8,000,000 Less: Cost of goods sold (3,500,000) Selling and administrative expense Depreciation expense Interest expense Earnings before taxes Income taxes Net income (2,000,000) (250,000) (150,000) 2,100,000 (700,000) reet, Santa Ana, CA $1,400,000 Common stock dividends Common Shares Outstanding $500,000 1,000,000 34) Based on the information in Table 4-1, the debt ratio is: b. c. d. 48.8% 45.2% 22.6%

Explanation / Answer

debt ratio

total of liabilities/total assets

2575000/5700000

45.2%

total of liabilities = total of current liabilities + total of long term debt

1375000+1200000

2575000

total of assets

5700000