Question

Line Corporation's balance sheet showed the following amounts for their liability and stockholders' equity accounts: Current Liabilities, $5,000; Bonds Payable, $1,500; Lease Obligations, $2,000; and Deferred Income Taxes, $300. Total stockholders' equity was $6,000. The debt-to-equity ratio is:___________

Answer 1

the debt-to-equity ratio is 1.47

Step-by-step explanation:

The computation of the debt-to-equity ratio is shown below

= (Current liabilities + Bonds payable + Lease obligations + Deferred income taxes) ÷ Total stockholder's equity

= ($5,000 + $1,500 + $2,000 + $300) ÷ $6,000

= 1.47

Hence, the debt-to-equity ratio is 1.47

Therefore the same should be considered and relevant