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pickupchik [31]
3 years ago
10

Golden Enterprises started the year with the following: Assets $50,000 Liabilities $15,000 Common Stock $30,000 Retained Earning

s $ 5,000 During the year, the company earned revenue of $2,500 all of which was received in cash, and incurred expenses of $1,500 all of which were unpaid as of the end In addition, the company paid dividends of $500 to owners. Assume no other activities occurred during the year.The amount of Golden's liabilities at the end of the year is:a. $15,000b. $16,500c. $14,000d. $16,000
Business
1 answer:
tia_tia [17]3 years ago
8 0

Answer:

b. $16,500

Explanation:

To find out the liabilities at the end of the year we simply added the opening liabilities and the expenses that are unpaid at the end of the year

In mathematically,

Ending liabilities = Beginning balance of liabilities + expenses unpaid

                           =$15,000 + $1,500

                           = $16,500

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The debt ratio is the total liabilities divided by total assets. At the end of the year, total assets stood at $266,000, the increase in retained earnings which is the excess of revenue over expenses and dividends payment does not affect  liabilities, as a result, liabilities stayed the same at $177,200.

Debt ratio=total liabilities/total assets

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debt ratio=66.62%

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