Question

At June 1, 2019 Left Company reported assets of $624,000 and liabilities
of $447,000. Left Company recorded the following transactions during the
month of June:

a. On June 1, the company spent $36,000 cash to purchase a 1-year insurance
   policy.

b. The company purchased inventory on account. The cost of the inventory
   was $43,000.

c. The company sold common stock to owners in the amount of $26,000.

d. On June 30, Left Company recorded the adjusting entry for the prepaid
   insurance that was used up during June.

Calculate Left Company's debt-to-equity ratio at June 30 after the four
transactions above have been recorded. Enter your answer as a number with
two places after the decimal point (i.e., 6.78).

Answer 1

	Particulars	Assets	"="	Liabilities	"+"	Equity
	At June 01	$                  6,24,000	"="	$          4,47,000	"+"	$ 1,77,000
	a) Cash paid to Purchase of 1 - Year Insurance	$                    -36,000	"="	0	"+"	0
	Recorded as advance payment and as current assets	$                      36,000
	b) Purchase inventory	$                      43,000	"="	43000	"+"	$              -
	c) Sold of common stock	$                      26,000	"="	0	"+"	$     26,000
	d) Expenses of $ 36,000/12 months =	$                      -3,000	"="	0	"+"	$     -3,000
	Closing of the total Assets & Liabiliites	$                  6,90,000		$          4,90,000		$ 2,00,000
	Debt to Equity Ratio = Total Debt / Total Equity
	Debt to Equity Ratio =
	Total Debt =	$                  4,90,000
	Divide By =	"/" By
	Total Equity=	$                  2,00,000
	Debt to Equity Ratio =	2.45
	Answer = Debt To Equity Ratio = 2.45 : 1