Timberlake Company has total assets, liabilities, and shareholders' equity of $28,000, $15,000, and $21,000, respectively, at the beginning of 2010.At the end of 2010, total assets, liabilities, and shareholders' equity were reported at $24,000, $13,000, and $19,000, respectively.
-What is Timberlake's debt to equity ratio?
A) 0. 70
B) 1. 17
C) 0. 71
D) 1. 13

Question

Quizplus · Accepted Answer

Debt/equity ratio = Average total liabilities / Average total shareholders' equity
= (($15,000 + $13,000)/2) / (($21,000 + $19,000)/2) = .70

Timberlake Company Has Total Assets, Liabilities, and Shareholders' Equity of $28,000