Please Refer to the Partial Balance Sheet Data Provided Below

question 63

Multiple Choice

Please refer to the partial balance sheet data provided below: $\begin{array}{|l|r|r|r|r|}\hline \text { (Dollar amounts in millions) } & 2014 & & 2013 & \\\hline & \text { Amount } & \text { \% of Total } & \text { Amount } & \text { \% of Total } \\\hline \text { Liabilities } & & & & \\ \hline \text { Current assets: } & & & & \\\hline \text { Accounts payable } & \$ 8,500 & 3.1 \% & \$ 7,300 & 2.9 \% \\\hline \text { Other current liabilities } & 1,400 & 0.5 \% & 3,900 & 1.6 \% \\\hline \text { Total current liabilities } & 9,900 & 3.6 \% & 11,200 & 4.5 \% \\\hline \text { Long-term notes payable } & 54,000 & 19.7 \% & 30,000 & 12.0 \% \\\hline \text { Total liabilities } & \$ 63,900 & 23.4 \% & \$ 41,200 & 16.5 \% \\\hline\text { Stockholders' Equity }\\\hline \text { Common stock } & \$ 12,000 & 4.4 \% & \$ 12,000 & 4.8 \% \\\hline \text { Paid-in capital in excess of par } & 149,000 & 54.5 \% & 149,000 & 59.6 \% \\\hline \text { Retained earnings } & 48,700 & 17.8 \% & 47,900 & 19.2 \% \\\hline \text { Total stockholders' equity } & \$ 209,700 & 76.6 \% & \$ 208,900 & 83.5 \% \\\hline \text { Total liabilities and stockholders' equity } & \$ 273,600 & 100.0 \% & \$ 250,100 & 100.0 \% \\\hline\end{array}$


-Which of the following would be a valid conclusion from the above data?

• A) Stockholders' equity was equal to 76.6% of total liabilities in 2014.
• B) Stockholders' equity declined to 76.6% of net sales in 2014.
• C) Stockholders' equity was up 76.6% over a 2-year period.
• D) Stockholders' equity, as a percentage of total liabilities and stockholders' equity, declined over a 2-year period.

---

Definitions:

Voluntary Disclosure

A process where an individual or entity willingly provides information or data without being coerced or obliged by law.

Evidence

Information presented in testimony or in documents that is used to persuade the judge or jury to decide the case in favor of one side or the other.

Overcharging

The act of asking for a price that is higher than what is fair or reasonable.

Inquisitorial System

A legal system where the court or a part of the court is actively involved in investigating the facts of the case, as opposed to an adversarial system where cases are presented by opposing parties.