The Following Balance Sheet Information Is Provided for Santana Company

question 120

Multiple Choice

The following balance sheet information is provided for Santana Company for Year 2: What is the company's debt to equity ratio (rounded to nearest whole percent) ?
$\begin{array}{|l|r|}\hline \text { Assets }\\\hline \text { Cash } & \$ 5,400 \\\hline \text { Accounts receivable } & 15,500 \\\hline \text { Inventory } & 18,000 \\\hline \text { Prepaid expenses } & 1,600 \\\hline \text { Plant and equipment, net of depreciation } & 20,200 \\\hline \text { Land } & 19,950 \\\hline \text { Total assets } & \$ 80,650 \\\hline\\\hline\text { Liabilities and Stockholders' Equity }\\\hline \text { Accounts payable } & \$ 4,500 \\\hline \text { Salaries payable } & 11,500 \\\hline \text { Bonds payable (Due in 2020) } & 19,000 \\\hline \text { Conmon stock, no par } & 30,000 \\\hline \text { Retained earnings } & 15,650 \\\hline \text { Total liabilities and stockholder' equity } & \$ 80,650 \\\hline\end{array}$

• A)42%
• B)130%
• C)43%
• D)77%

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Definitions:

Standard Cost

A predetermined cost of manufacturing a single unit or a number of units during a specific time period for budgeting and financial control.

Journalize

The process of recording transactions in the journal of a company, detailing the financial activities.

Manufacturing Overhead Variance

The difference between the actual manufacturing overhead costs incurred and the overhead costs allocated to the production process based on a predetermined rate.

Direct Labor Hours

The cumulative working hours of employees directly engaged in the production process.