THE SOLUTION IS ALREADY GIVEN, MAKE ONLY AN INTERPRETATION FOR THIS PROBLEM 5 sentences
THE SOLUTION IS ALREADY GIVEN, MAKE ONLY AN INTERPRETATION FOR THIS PROBLEM 5 sentences
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter6: Losses And Loss Limitations
Section: Chapter Questions
Problem 11P
Related questions
Question
100%
![Dave's Guitar Shop is thinking about building an additional
property onto the back of its existing building for more storage.
Dave consults with his banker about applying for a new loan.
The bank asks for Dave's balance to examine his overall debt
levels. Dave's total assets is P5,000,000 while his total liabilities
is P25,000. Compute Dave's debt ratio.
Debt Ratio - It is calculated by dividing total debt or total liabilities by total assets.
Assets: It is the resources owned by company.
Liabilities:- It is the obligation of company that will be settled in future date.
Working Note #:-
Total Debt = Total Liabilities = P25,000
Total Assets = P5,000,000
Debt Ratio = Total Debt/Total Assets
= P25,000/P5,000,000
= 0.005
Final Solution :-
Dave's Debt Ratio is 0.005
THE SOLUTION IS ALREADY GIVEN, MAKE ONLY AN
INTERPRETATION
FOR THIS PROBLEM
5 sentences](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F58a53162-b1cb-487d-a869-0ab2c8eadd5e%2F0db09f4d-79e6-4f4a-ab93-ff67a186ac3c%2Fkkrynte_processed.png&w=3840&q=75)
Transcribed Image Text:Dave's Guitar Shop is thinking about building an additional
property onto the back of its existing building for more storage.
Dave consults with his banker about applying for a new loan.
The bank asks for Dave's balance to examine his overall debt
levels. Dave's total assets is P5,000,000 while his total liabilities
is P25,000. Compute Dave's debt ratio.
Debt Ratio - It is calculated by dividing total debt or total liabilities by total assets.
Assets: It is the resources owned by company.
Liabilities:- It is the obligation of company that will be settled in future date.
Working Note #:-
Total Debt = Total Liabilities = P25,000
Total Assets = P5,000,000
Debt Ratio = Total Debt/Total Assets
= P25,000/P5,000,000
= 0.005
Final Solution :-
Dave's Debt Ratio is 0.005
THE SOLUTION IS ALREADY GIVEN, MAKE ONLY AN
INTERPRETATION
FOR THIS PROBLEM
5 sentences
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