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Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the adjusted debt to assets ratio?

Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the adjusted debt to assets ratio?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Consider the following worksheet with information extracted from a financial statement:

2020                        Assets                  Liabilities                     Equity
Reported (P)            500 000                100 000                      400 000

You believe the firm has omitted a provision pertaining to a lawsuit. You assess this provision is valued at P30 000 and that it will be paid in the next six months. Using the worksheet approach and assuming a corporate tax rate of 30 percent, what would be the adjusted debt to assets ratio?

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