Question

Required information The following information applies to the questions displayed below. The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2016 and 2017 Cash Accounts receivable Office supplies Office equipment Trucks Building Land Accounts payable Note payable 46,870 7,510 25,007 19,686 2,889 121,093 128,987 47,385 56, 385 8 157,962 0 39,418 65,745 32,608 0 97,380 3,945 3. Compute the 2017 year-end debt ratio for the business. Debt Ratio Choose Denominator: - Debt Ratio Debt ratio Choose Numerator

Answer 1

Solution:

Debt ratio:

Choose Numerator	/	Choose Denominator	=	Debt ratio
Total liabilities	/	Total assets	=	Debt ratio
129,988	/	412,757	=	31.49

　

Working:

Accounts payable	32,608
Note payable	97,380
Total liabilities	129,988
Cash	7,510
A/R	19,606
Office supplies	2,889
Office equipment	128,987
Trucks	56,385
Bld	157,962
Land	39,418
Total assets	412,757