Orange Company Statement of Financial Position December 31, Year 2 and Year I (d

Question

Orange Company Statement of Financial Position December 31, Year 2 and Year I (dollars in thousands) Year 2 Year 1 Current assets: Cash and marketable securities Inventory Prepaid expenses 130 $110 180 180 160 160 60 60 530 510 Total current assets Noncurrent assets: Total assets Current liabilities: Plant & equipment, net L680 L620 Accounts payable $90 $100 Accrued liabilities 60 80 360 250 300 Netes reyable, sbert term Total current liabilities... Noncurrent liabilities: 310 Bonds payable Total liabilities Stockholders' equity 560 660 Preferred stock, $10 par, 15% Common stock, $5 par 120 120 220 220 Additional paid-in capital-common stock.210 210 1.100920 1650 1470 Retained earnings Total stockholders' equity. Total liabilities& stockholders' equity Orange Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) $2,830 Sales (all on account) Cost of goods sold Gross margin Selling and administrative expens Net operating income Interest expense Net income before taxes Income taxes (30%) Net income 340 510 30 480 144 $336 The market price of a share of common stock on December 31, Year 2 was $100

Explanation / Answer

Solution: Debt to assets ratio(year 2) ;

= Total liabilities/Total assets

= 560/2210 = 0.2534 or 25.34%

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