Debt Ratio: It refers to the ratio between the total debt that a company owes and the total assets that a company owns. It is used to calculate the financial leverage of a company. In other words, it shows that how much debt a company is having as a percentage of its assets. The formula to calculate debt ratio is, Debt Ratio = Total Debt Total Assets × 100 To compute: Debt ratio of H.D Company.

Question

Problem 3-2B Preparing adjusting and subsequent journal entries P1 P2 P3 P4 Natsu Company's annual accounting period ends on October 31. The following information concerns the adjusting entries that need to be recorded as of that date. Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Building; Accumulated Depreciation- Building; Salaries Payable; Unearned Revenue; Rent Revenue; Salaries Expense; Office Supplies Expense; Insurance Expense; and Depreciation Expense-Building. a. b. c. d. e. f. The Office Supplies account started the fiscal year with a $600 balance. During the fiscal year, the company purchased supplies for $4,570, which was added to the Office Supplies account. The supplies available at October 31 totaled $800. The Prepaid Insurance account had a $12,000 debit balance at October 31 before adjusting for the costs of any expired coverage for the fiscal year. An analysis of prepaid insurance shows…

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Question

Chapter 2, Problem 12QS

To determine

Debt Ratio:

It refers to the ratio between the total debt that a company owes and the total assets that a company owns. It is used to calculate the financial leverage of a company. In other words, it shows that how much debt a company is having as a percentage of its assets.

The formula to calculate debt ratio is,

Debt Ratio = Total Debt Total Assets ×100

To compute: Debt ratio of H.D Company.

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