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The Following Balance Sheet Information Is Provided for Santana Company

Question 120

Multiple Choice

The following balance sheet information is provided for Santana Company for Year 2:  Assets  Cash $6,000 Accounts receivable 12,150 Inventory 15,000 Prepaid expenses 1,800 Plant and equipment, net of depreciation 19,700 Land 13,600‾ Total assets $68,250‾ Liabilities and Stockholders’ Equity  Accounts payable $2,910 Salaries payable 8,030 Bonds payable (Due in ten years)  13,000 Common stock, no par 15,500 Retained earnings 28,810‾ Total liabilities and stockholders’ equity $78,250\begin{array}{lr}\text { Assets }\\\text { Cash } & \$ 6,000 \\\text { Accounts receivable } & 12,150 \\\text { Inventory } & 15,000 \\\text { Prepaid expenses } &1,800 \\\text { Plant and equipment, net of depreciation } & 19,700 \\\text { Land } & \underline{ 13,600 }\\\text { Total assets } &\underline{ \$68,250}\\\text { Liabilities and Stockholders' Equity }\\\text { Accounts payable } & \$ 2,910 \\\text { Salaries payable } & 8,030 \\\text { Bonds payable (Due in ten years) } & 13,000 \\\text { Common stock, no par } & 15,500 \\\text { Retained earnings } &\underline{ 28,810} \\\text { Total liabilities and stockholders' equity }& \$ 78,250\end{array} What is the company's debt to equity ratio?


A) 135.11%
B) 33.28%
C) 40.73%
D) 54.03%

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