Hayes, Inc. had the following balances on its 12/31/13 balance sheet. If Hayes were to purchase land for $40,000 on credit under an agreement to pay for the land in one year, what would be its debt-to-assets ratio immediately after the purchase?

Question

Hayes, Inc. had the following balances on its 12/31/13 balance sheet.  If Hayes were to purchase land for $40,000 on credit under an agreement to pay for the land in one year, what would be its debt-to-assets ratio immediately after the purchase?

Quizplus · Accepted Answer

($85,000 + $40,000)/($230,000 + $40,000) = 46%