Ed's Tobacco Shop Has Total Assets of $100 Million

question 59

Multiple Choice

Ed's Tobacco Shop has total assets of $100 million. Fifty percent of these assets are financed with debt of which $37 million is current liabilities. The firm has no preferred stock but the balance in common stock and paid-in surplus is $32 million. Using this information what is the balance for long-term debt and retained earnings on Ed's Tobacco Shop's balance sheet?

• A) $18 million; $27 million
• B) $12 million; $12 million
• C) $14 million; $29 million
• D) $13 million; $18 million

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Definitions:

High-Risk Drinking

Alcohol consumption at levels that significantly increase the risk of harm to oneself or others.

Cirrhosis

A chronic liver disease marked by degradation of liver tissue, leading to liver failure.

Alcohol Dependence

A medical condition characterized by a strong craving for alcohol, inability to control drinking, and physiological withdrawal symptoms when alcohol use is stopped.

FASDs

Fetal Alcohol Spectrum Disorders; a range of effects that can occur in a person whose mother drank alcohol during pregnancy.