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The Following Data Were Taken from Harrison Company's Balance Sheet

question 68

Essay

The following data were taken from Harrison Company's balance sheet:
Dec. 31, 2012 Dec. 31, 2011
Total liabilities $150,000 $105,000
Total owner's equity 75,000 60,000
a. Compute the ratio of liabilities to owner's equity.
b. Has the creditors' risk increased or decreased from December 31, 2011, to December 31, 2012?

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Definitions:

Grams

A metric unit of mass equal to one thousandth of a kilogram.

Pupil

The part of the eye located in the center of the iris that controls the amount of light entering the eye.

Iris

The colored part of the eye surrounding the pupil, responsible for controlling the amount of light reaching the retina.

Eyeball

The organ of vision that receives light and images, enabling sight.

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