Alpha Company Provided the Following Balance Sheet for Year 2

question 115

Multiple Choice

Alpha Company provided the following balance sheet for Year 2: $\begin{array}{lr}\text { Cash } & \$ 5,400 \\\text { Accounts receivable } & 15,500 \\\text { Inventory } & 18,000 \\\text { Prepaid expenses } & 1,600\\\text { Plant and equipment, net of depreciation } & 20,200 \\\text { Land } & \underline{19,950} \\\text { Total assets } & \underline{\$ 85,450} \\\text { Liabilities and Stockholders'Equity }\\\text { Accounts payable } & \$ 4,500 \\\text { Salaries payable } & 11,500\\\text { Bonds payable (due in ten year's) } & 10,000 \\\text { Common stock, no par } & 30,000 \\\text { Retained earnings } & \underline{ 29,450}\\\text { Total liabilities and stockholder's' equity } & \underline{ \$ 85,450}\end{array}$
What is the company's plant assets to long-term liabilities ratio?

• A) 2.5
• B) 4.5
• C) 1.7
• D) None of these answers are correct.

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