10 February, 06:57

# At the beginning of the current year, Snell Co. total assets were \$260,000 and its total liabilities were \$180,200. During the year, the company reported total revenues of \$105,000, total expenses of \$82,000 and owner withdrawals of \$11,000. There were no other changes in owner's capital during the year and total assets at the end of the year were \$272,000. The company's debt ratio at the end of the current year is?

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1. 10 February, 10:11
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66.25%

Explanation:

Total assets = Total liabilities + total equity

Total equity = Total assets - Total liabilities

= \$260,000 - \$180,200

= \$79,800

Beginning equity = \$79,800

Equity at the year-end:

= Revenues - Expenses - Withdrawal + Beginning equity

= \$105,000 - \$82,000 - \$11,000 + \$79,800

= \$91,800

Total assets at end = Total liabilities + Total equity at end

\$272,000 = \$180,200 + \$91,800

\$272,000 = \$272,000

Debt ratio = Total debt : Total assets

= \$180,200 : \$272,000

= 0.6625

= 66.25%