Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 52

For the following questions, circle the best response.

Use the following information for Question.

Porter Co. reported the following on its December 31, 2010, balance sheet:

Liabilities and Owners’ Equity:
Accounts payable	$ 3,000
Notes payable	22,000
Bonds payable	45,000
Common stock	110,000
Preferred stock	20,000
Additional paid-in capital	70,000
Retained earnings	32,000
Treasury stock	12,000

The debt/equity ratio for Porter Co. in 2010 (rounded) is

a. 20.5%

b. 24.1%

c. 28.7%

d. 31.8%