Given Below Are the Balance Sheet at December 31,20X3 and Income

question 32

Essay

Given below are the balance sheet at December 31,20X3 and income statement of Zeus Company for the year ended,December 31,20X3.Determine the following:
(a)The debt-to-equity ratio
(b)Long-term-debt-to-total-capital ratio
(c)Debt-to-total-assets ratio
(d)The interest-coverage ratio.
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Zeus Company }$
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Balance Sheet }$
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { December } 31,20 \times 3$

$\begin{array}{l}\begin{array}{lll}\text { Current Assets: }\\\text { Cash } & \$ 3,300 \\\text { Accounts Receivable } & 5,900 \\\text { Inventory } & \underline{11,100} \\\text { Total } & \$ 20,300 \\\text { Fixed Assets } & \$ 59,300 \\\text { Less: Accum. Depr. } & \underline{(13,800}) \\\text { Fixed Assets, net } & \underline{45,500}\\\\\\\\\text { Total Assets }&\underline{\$ 65,800}\end{array}\begin{array}{lll}\text { Current Liabilities: }\\\text { Accounts Payable } && \$ 4,900 \\\text { Interest Payable } && 1,500 \\\text { Wages Payable } && \underline{2,100} \\\text { Total Current Liabilities } && \$ 8,500 \\\text { Long-term Bond Payable } && \underline{35,000} \\\text { Total Liabilities } && \$ 43,500\\\text { Stockholders' Equity: }\\\text { Common Stock } & \$ 12,000 & \\\text { Retained Earnings } & \underline{10,300} & \underline{22,300} \\\text { Total Liabilities } & & \\\text { \& Stockholders' Equity } & \$ \underline{\underline{\$ 65,800}}\end{array}\end{array}$

$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Zeus Company }$
$\quad$$\quad$$\quad$$\quad$$\text { Income Statement }$
$\text { For The Year Ended December 31, 20X3 }$

$\begin{array}{lr}\text { Sales } & \$ 94,000 \\\text { Cost of Goods Sold } & \underline {51,000} \\\text { Gross Profit } & \$ 43,000 \\\text { Operating expenses } & \underline {35,000}\\\text { Operating income } & \$ 8,000 \\\text { Interest expense } & \underline {\$ 3,000 }\\\text { Income before taxes } & \$ 5,000 \\\text { Income tax expense } & \underline {\$ 2,300} \\\text { Net Income } &\underline { \$ 2,700} \\\end{array}$

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