Aussie Foods Pty Ltd has a debt ratio of .57, current liabilities of $14 000 and total assets of $70 000.What is the level of Aussie Foods' total liabilities?

Question

Quizplus · Accepted Answer

To find the total liabilities, we need to use the debt ratio formula:

Debt Ratio = Total Liabilities / Total Assets

We are given the debt ratio (.57) and the total assets ($70,000):

.57 = Total Liabilities / $70,000

Solving for Total Liabilities:

Total Liabilities = .57 * $70,000

Total Liabilities = $39,900

Therefore, the level of Aussie Foods' total liabilities is $39,900.

The correct answer is C.

Aussie Foods Pty Ltd Has a Debt Ratio of