A company's balance sheet shows the following amounts for liabilities and shareholders' equity accounts: current liabilities,$50,000; bonds payable,$600,000; finance lease obligations,$120,000; and deferred income tax liability,$20,000.Total shareholders' equity is $520,000.What is the debt-to-equity ratio?

Question

Quizplus · Accepted Answer

$50,000 (Current liabilities)+ $600,000 (Bonds payable)+ $120,000 (Lease obligations)+ $20,000 (Deferred income taxes)/ $520,000 (Total shareholders' equity)=
$790,000 / $520,000 = 1.519 or 1.52

A Company's Balance Sheet Shows the Following Amounts for Liabilities