The Following Balance Sheet Information Is Provided for Santana Company

question 114

Multiple Choice

The following balance sheet information is provided for Santana Company for Year 2: $\begin{array}{lr}\text { Cash } & \$ 5,400 \\\text { Accounts receivable } & 15,500 \\\text { Inventory } & 18,000 \\\text { Prepaid expenses } & 1,600\\\text { Plant and equipment, net of depreciation } & 20,200 \\\text { Land } & \underline{19,950} \\\text { Total assets } & \underline{\$ 80,650} \\\text { Liabilities and Stockholders'Equity }\\\text { Accounts payable } & \$ 4,500 \\\text { Salaries payable } & 11,500\\\text { Bonds payable (due in ten year's) } & 19,000 \\\text { Common stock, no par } & 30,000 \\\text { Retained earnings } & \underline{ 15,650}\\\text { Total liabilities and stockholder's' equity } & \underline{ \$ 80,650}\end{array}$
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:

Volcano

A geological formation, typically a mountain, where magma (lava), volcanic ash, and gases are expelled through the earth's crust.

Organization

A structured group of people working together to achieve specific goals.

Characteristics

Qualities or features that are typical of a person, thing, or group and serve to identify them.

Delegation

The assignment of responsibility or authority from one person to another for specific tasks or functions.