Below Are Selected Data from the Financial Statements of Moriarty

question 79

Multiple Choice

Below are selected data from the financial statements of Moriarty Company. $\begin{array}{lrr}&2018&2017\\\text { Total liabilities } & \$ 1,205,000 & \$ 952,000 \\\text { Common stock }(\$ 30 \text { par) } & 250,000 & 225,000 \\\text { Paid-in capital in excess of par-Common stock } & 150,000 & 135,000 \\\text { Retained earnings } & 155,000 & 145,000\end{array}$ The debt-to-equity ratio for 2018 is

• A)increasing,which should be a major cause of concern for Moriarty Company.
• B)increasing,which should be a good sign in investors' eyes.
• C)decreasing,which should be a major cause of concern for Moriarty Company.
• D)decreasing,which should be a good sign in investors' eyes.

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Definitions:

Incidence of Tax

The analysis of who bears the economic burden of a tax, considering how the tax affects the distribution of economic welfare.

Tax Burden

The impact of taxes on an individual or entity, measured by the total amount of tax payments relative to income or profits.

Rate Structure

The system or scheme of pricing established for services and goods, including the way different charges or tariffs are applied.