Explanation Given Information: The company Café Europa has total assets of $ 2 , 875 , 000 and total liabilities of $ 2 , 189 , 100 . Formula used: The working capital is calculated as follows: Owner's equity = Total Assets − Total liabilities The debt to assets ratio is calculated as follows: Debt to assets ratio = Total liabilities Total assets The debt to equity ratio is calculated as follows: Debt to equity ratio = Total liabilities Owner's equity Calculation: Consider total assets of $ 2 , 875 , 000 , total liabilities of $ 2 , 189 , 100 . Compute the owner’s equity: Substitute $ 2 , 875 , 000 for total assets, and $ 2 , 189 , 100 for total liabilities in the formula, Owner's equity = Total Assets − Total liabilities = $ 2 , 875 , 000 − $ 2 , 189 , 100 = $685,900 Hence, owner’s equity is $ 685 , 900

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ISBN: 9781305888715

Author: Brechner

Publisher: CENGAGE LEARNING - CONSIGNMENT

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Chapter 15.III, Problem 24RE

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To calculate: The amount of owner’s equity, debt to assets ratio and debt to equity ratio of the company Café Europa which has total assets of $2,875,000 and total liabilities of $2,189,100.

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Chapter 15.III, Problem 23RE

Chapter 15.III, Problem 25RE

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The amount of owner’s equity, debt to assets ratio and debt to equity ratio of the company Café Europa which has total assets of $ 2 , 875 , 000 and total liabilities of $ 2 , 189 , 100 .

Solution Summary: The author calculates the amount of owner's equity, debt to assets ratio, and debt-to-equity ratio of the company Café Europa.

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To calculate: The amount of owner’s equity, debt to assets ratio and debt to equity ratio of the company Café Europa which has total assets of $2,875,000 and total liabilities of $2,189,100.

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