Flag question Cash Cost of goods sold 90555 Short term debt

Flag question Cash Cost of goods sold 90,555 Short term debt Sales(revenue) Building Long term debt Expenses Inventory Interest expense Equipment Accounts payable 122,000 Accounts receivable 36,000 Equity Marketable securities 150,000 12.000 100,000 241,055 175,000 120,000 73,555 37,955 6,000 32,733 35,000 As of December 31, 2012 whatis thedebt to equity ratio for Peter\'s Cookies Select one O a. 118.01% O b. 72.05% O c. 72.02% d. 52.07%

Solution

ANSWER = A) 118.01%

Debt to equity ratio = Debt / Equity stockholders fund

= 120000 / ( 35000 + 66688)

= 118.01%

Reserve and surplus = Sales - Cost of goods sold - Expense - Interest expense - Income tax

= 241055 - 90555 - 73555 - 6000 - 4257

= 66688

Balance Sheet
Cash	12000	Short term debt	100000
Building	175000	Long term debt	120000
Inventory	37955	Accounts payable	122000
Equipment	32733
Accounts Receivable	36000	Equity	35000
Marketable securities	150000	Reserve and surplus	66688
	443688		443688