Question

Please construct a balance sheet for the following company for each year. Then calculate their debt-to-asset...

Please construct a balance sheet for the following company for each year. Then calculate their debt-to-asset ratios for each year.

A) For December 31, 2010, the business had current assets of: $3,278 cash; $6,954 accounts receivable; $17,417 inventory. Plant and equipment totaled $144,500. Current liabilities were: accounts payable $9,250; wages payable $1,110; property and taxes payable $3,650. Long-term debt totaled $75,800; and owner's equity $82,339.

B) For December 31, 2011, the business had current assets of: $1,844 cash, $11,807 accounts receivable, and $9,628 inventory. Plant and equipment totaled $158,700. Current liabilities were: accounts payable $13,446; wages payable $650; and property and taxes payable $4,124. Long term debt totaled $92,800; and the owner's equity $70.959.

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Answer #1
Balance Sheet for the year ended
Particulars 31-12-10 31-12-11
Amount in $ Amount in $
Asset
Current Asset
Cash 3278 1844
Accounts Receivable 6954 11807
Inventory 17417 9628
Fixed Asset
Plant & Equipment 144500 158700
Total Assets 172149 181979
Liabilities
Current Liabilities
Accounts Payables 9250 13446
Wages Payable 1110 650
Property & Tax Payables 3650 4124
Non Current Liabilities
Long Term Debt 75800 92800
Owners' Equity 82339 70959
Total Liabilities 172149 181979
Debt To Asset Ratio 0.52 0.61

Debt to Asset ratio will calculate by using the following formula

Total Debt (Short term and Long Term) / Total Asset

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