If the ratio of total liabilities to total assets is 0.5,long-term liabilities are $3,000,and equity is $5,000,then::
A) you know that current liabilities must be $ 2,000.
B) you know that current assets must be $400.
C) you know that retained earnings must be $800.
D) you know that preferred stock must be $400.

Question

Quizplus · Accepted Answer

Total liabilities / total assets = (long-term liabilities + current liabilities) / (long-term liabilities + current liabilities + equity)0.5 = ($3,000 + current liabilities) / ($3,000 + current liabilities + $5,000)Current liabilities = $2,000

If the Ratio of Total Liabilities to Total Assets Is