Spinnit, Limited has a debt ratio of .57, current liabilities of $14,000, and total assets of $70,000. What is the level of Spinnit, Limited's total liabilities?
A) $25,900
B) $24,600
C) $39,900
D) $53,900

Question

Quizplus · Accepted Answer

Debt ratio= total liabilities/total assets

Therefore, total liabilities= debt ratio x total assets

Substituting the given values:

Total liabilities= .57 x $70,000 = $39,900

Hence, the correct answer is option C ($39,900).

Spinnit, Limited Has a Debt Ratio of