Use the following statement of ﬁnancial position and statement of comprehensive income What is the equity multiplier for Bluebird for 2015?
A) 1.53
B) 1.56
C) 1.59
D) 1.61
E) 1.64

Question

Use the following statement of ﬁnancial position and statement of comprehensive income   What is the equity multiplier for Bluebird for 2015?
A) 1.53 
B) 1.56 
C) 1.59 
D) 1.61 
E) 1.64

Quizplus · Accepted Answer

The equity multiplier is calculated as Total Assets/Total Equity. 
For Bluebird in 2015: 
Total Assets = $1,073,000 + $395,000 + $681,000 = $2,149,000 
Total Equity = $937,000 
Equity Multiplier = $2,149,000/$937,000 = 2.293 
Therefore, the equity multiplier for Bluebird in 2015 is 2.293, which is closest to B) 1.56.

Use the Following Statement of ﬁNancial Position and Statement of Comprehensive