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Falmouth Corporation's debt to equity ratio is 0.6. Current liabilities are $120,000, long term liabilities are $360,000, and working capital is $140,000. Total assets of the corporation must be:

Respuesta :

Answer:

$1,280,000        

Explanation:

We know that

Debt to equity ratio = Debt ÷ total equity

0.6 = $360,000 + $120,000 ÷ total equity

0.6 = $480,000 ÷ total equity

So, the total equity = $800,000

In the balance sheet, the assets, liabilities, and stockholder equity is recorded. In this the accounting equation is used which is shown below:  

Total assets = Total liabilities + stockholder equity  

                    = $480,000 + $800,000

                    = $1,280,000

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