Dynasty Industries Reported Total Liabilities of ¥9,000,000 and Total Assets

question 13

Multiple Choice

Dynasty Industries reported total liabilities of ¥9,000,000 and total assets of ¥12,000,000.If the exchange rate changes to ¥110 = $1, what will be the change in the debt ratio assuming the account balances remain constant?

• A)Decrease by 8.3%
• B)Increase by 8.3%
• C)Decrease by 9.1%
• D)No change

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Definitions:

Process Cost System

An accounting method used to track costs associated with producing homogenous products in continuous processes.

Work In Process

Inventory that includes goods in the production process but not yet completed, often referred to as WIP.

Conversion Costs

The combined costs of direct labor and overhead that are incurred to convert raw materials into finished products.

Raw Steel

The unprocessed product from melting iron ore, scrap steel, and other additives in a blast furnace, which is the base material for making steel products.