Question

The debt to equity ratio for the Puttoner Lodging Company was 2.10 at the end of 2015. If this company’s total liabilities were $45,000,000 at the end of 2015, what was the total owner’s equity for the Puttoner in 2015? Group of answer choices $21,428,571 $24,566,450 $18,900,230 $25,885,612

Answer 1

Solution:

Debt / Equity = 2.10

Total liabilities / Total owner's equity = 2.10

$45,000,000 / Total owner's equity = 2.10

Total owner's equity = $45,000,000 / 2.10 = $21,428,571

Hence first option is correct.