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Long term assets

At the end of the year just completed, ABC Company's current liabilities totaled $75,000, and its long-term liabilities totaled $225,000. Working capital at year-end was $100,000. If the company's debt-to-equity ratio is 0.30 to 1, total long-term assets must equal:
A) $1,000,000.
B) $1,300,000.
C) $1,125,000.
D) $1,225,000.

Solution Preview

Total liabilites = 75,000+225,000=300,000
Debt/equity = 0.30 to 1
Amount of equity is ...

Solution Summary

The solution explains the calculation of long term assets given the debt to equity ratio