The Following Balance Sheet Information Is Provided for Santana Company

question 136

Multiple Choice

The following balance sheet information is provided for Santana Company for Year 2: $\begin{array}{|l|r|}\hline \text { Assets } &\\\hline \text { Cash } &\$ \quad 5,400 \\\hline \text {Accounts receivable } &15,500 \\\hline \text {Inventory } &18,000 \\\hline \text { Prepaid expenses } &1,600 \\\hline \text { Plant and equipment, net of depreciation } &20,200 \\\hline \text { Land } &\underline { 19,950} \\\hline \text {Total assets} & \underline { \$ \quad 80,650 }\\\hline \\\hline \text {Liabilities and Stockholders' Equity } &\\\hline \text {Accounts payable } & \$ \quad 4,500 \\\hline \text {Salaries payable} &11,500 \\\hline \text {Bonds payable (Due in 2020) } & 19,000 \\\hline \text {Common stock, no par } &30,000 \\\hline \text {Retained earnings } &\underline { 15,650} \\\hline \text { Total liabilities and stockholder' equity } &\underline { \$ \quad 80,650} \\\hline\end{array}$ What is the company's debt to equity ratio (rounded to nearest whole percent) ?

• A) 42%
• B) 130%
• C) 43%
• D) 77%

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Definitions:

Propinquity

The tendency for people to form close relationships or feel a sense of attraction with others who are geographically close or frequently encountered.

Unbalance

A state of lack of equilibrium or stability, either physically, emotionally, or in terms of a system or situation.

Acquiescence

The act of agreeing or consenting without protest, often with little enthusiasm or conviction.

Homeostasis

The ability of a living organism to maintain stable internal conditions despite changes in external environments.