Chestnut,Inc

question 42

Multiple Choice

Chestnut,Inc.reported the following balances on its balance sheet at December 31,Year 1:

On January 1,Year 2,Chestnut purchased equipment for $40,000 on account.What is the company's debt-to-assets ratio immediately after the purchase of the equipment?

• A) 0.42
• B) 0.46
• C) 0.37
• D) 0.34

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Definitions:

Substance

A form of matter with a specific chemical composition and distinct properties, distinct from mixtures.

Chemical Sample

A small part or quantity of a chemical substance taken to show the quality or nature of the whole.

Density

Density refers to the mass per unit volume of a substance, indicating how closely packed the particles are within the material.

Liquid

A state of matter characterized by a fixed volume but no fixed shape, allowing it to flow and take the shape of its container.