The Following Information Pertains to Barnum Company: Balance Sheet $31,20 \mathrm{X} 2$

question 80

Multiple Choice

The following information pertains to Barnum Company: Balance Sheet
At December $31,20 \mathrm{X} 2$
$\begin{array}{lrlr}\text { Current assets } & \$ 18,700 & \text { Current liabilities } & \$ 7,600 \\\text { Long-term assets } & 29,700 & \text { Long-term liabilities } & 13,250\\&&\text { Stockholders' equity }&27,550\\\text { Total assets }&\$ 48,400& \text { Total assets }&\$ 48,400 \end{array}$

Barnum Company
Income Statement
For the Year Ended December $31,20 \mathrm{X} 2$
$\begin{array}{lr}\text { Sales } & \$ 106,950 \\\text { Less: Cost of goods sold } & \underline{61,800) } \\\text { Gross profit } & \$ 45,150 \\\text { Less: Operating expenses } & \underline{31,700} \\\text { Operating income } & \$ 13,450 \\\text { Less other expenses: interest } & \underline{1,300) } \\\text { Income before taxes } & \$ 12,150 \\\text { Less: Income tax expense } & \underline{4,850) } \\\text { Net income } & \$ 7,300\end{array}$ There were 1,000 shares of common stock outstanding with a market value of $75 as of December 31, 20X2.Dividends declared and paid was $5 per share.The current-debt-to-equity ratio for 20X2 is _____.

• A)75.7%
• B)27.6%
• C)15.7%
• D)43.1%

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Definitions:

Encoding Specificity Principle

The principle that recall is most effective when information available at the time of recall is similar to the information available at the time of encoding.

Depth-Of-Processing Principle

A concept suggesting that information that is thought about at a deeper, more meaningful level is more likely to be remembered than information processed at a superficial level.

State-Dependent Memory

The phenomenon wherein information learned in a particular state of mind is more readily recalled when in the same state.

Levels-of-processing

A theory suggesting that the depth of mental processing affects memory; deeper processing leads to better recall.