Question

Acme incorporated has a debt ratio of .42, noncurrent liabilities of $20,000 and total assets of $70,000. what is acme's level of current liabilities? select one:

a. $9,400
b. $8,400
c. $10,600
d. $12,348

Answer 1

Hello!
The formula is
Debt radio=(current liabilities+noncurrent liabilities)÷total assets

0.42=( x+20000)÷70000
Solve for x
0.42×70000=x+20000
X=0.42×70000-20000
X=9400....current liabilities which is the answer.

Good luck!