Question

The total debt-to-total-assets ratio of Randford Co. was 0.29. The total assets of Randford were $200,000. What is the amount of total debt owed by the company?

a) $200,000
b) $58,000
c) $142,000
d) $58,500

Answer 1

The total debt owed by Radford Co. is calculated by multiplying the total assets of $200,000 by the debt ratio of 0.29, which results in a total debt of $58,000.

Step-by-step explanation:

The student has asked for the amount of total debt owed by Radford Co. given that their total debt-to-total-assets ratio is 0.29 and total assets are valued at $200,000. To calculate the total debt, you multiply the total assets by the debt ratio. Therefore, the calculation would be $200,000 (total assets) × 0.29 (debt ratio) = $58,000. So, the amount of total debt owed by the company is $58,000, which corresponds to option b).