Question

# Orem Corporation's current liabilities are \$106,800, its long-term liabilities are \$267,200, and its working capital is...

Orem Corporation's current liabilities are \$106,800, its long-term liabilities are \$267,200, and its working capital is \$149,500. If the corporation's debt-to-equity ratio is 0.10, total long-term assets must equal:

• \$2,789,700

• \$3,964,500

• \$3,740,000

• \$3,857,700

 Calculation of amount of long term assets Total debt = Current laibilities+long term laibilities total debt = 106800+267200 total debt = 374000 Debt to equity ratio= 0.10 Total equity = total debt / 0.10 total equity = 374000/0.10 total equity = 3740000 total assets = total debt+total equity total assets = 374000+3740000 total assets = 4114000 working capital = current assets-current laibilities 149500 = current assets- 106800 current assets = 256300 total long term assets = total asset -current assets total long term assets = 4114000-256300 total long term assets = 3857700 Option \$ 3857700 is correct

#### Earn Coins

Coins can be redeemed for fabulous gifts.