At the beginning of the current year, Trenton Company's total assets were 258,000 and its total...

At the beginning of the current year, Trenton Company's total assets were 258,000 and its total liabilities were 180,000 during the year the company reported total revenues of 103,000, total expenses of 81,000 and dividends of 10,000. There were no other changes in equity during the year and total assets at the end of the year were 270,000. Trenton Company's debt ratio at the end of the current year is. A 50.0%. B 1.50%. C 66.7% D 33.3% E 69.8%

Solutions

Expert Solution

Ending total assets		$ 270,000
Less: Ending stockholders equity
Beginning stockholders equity ($258,000-$180,000)	$ 78,000
Add: Revenues	$ 103,000
Less: Expenses	$ (81,000)
Less: Dividends	$ (10,000)
Ending stockholders Equity		$ 90,000
Ending liabilities		$ 180,000

Debt ratio = Total liabilities / Total assets

Debt ratio = $180,000 / $270,000

Debt ratio = 66.7%

Answer is C. 66.7%

ekkarill92 answered 2 years ago

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