May I ask for a solution and explanation to the problem for a better understanding. Thank you!For Carrot Corp, what is the debt to asset ratio?a. 25.52 : 1b. 23.64 : 1c. 20 : 1d. 22.54 : 1 Carrots CorporationStatement of IncomeFor the Year Ended November 30, Year 2(in thousands of pesos)Sales (all on credit)Cost of goods soldGross marginOperating expensesP200,000(120,000)80,000(38,000)Net operating incomeInterest expense42,000(2,000)Net income before income tax40,000Income tax expense(15,000)P 25,000Net income Financial statements of CARROTS Corporation are reproduced below. The market price of Carrot's ordinary sharewas P20 per share on November 30, Year 2.Carrots CorporationStatement of Financial PositionAs of November 30(in thousands of pesos)Year 2Year 1CashP 3,000P 2,000Trading securitiesAccounts receivable (net)Merchandise inventory1,0001,00014,00011,00024,00016,000Total current assetsP 42,000P 30,000Property, plant, and equipment (net)Long-term investments68,00060,00010,00010,000Total assetsP120,000P100,000P 5,000P 4,000Accounts payableWages payable1,0001,000Total current liabilitiesP 6,000P 5,000Bonds payable, 10%20,00020,000P 25,000P 26,000P 25,000Total liabilitiesOrdinary share capital, no par, 10,000,000 sharesAccumulated profitsTotal shareholders' equityTotal liabilities and shareholders' equityP 25,00069.00050,000P 94,000P 75,000P120.000P100,000

The formula of Debt to Asset Ratio = Total Debt/ Total Assets

Answered: May I ask for a solution and…

May I ask for a solution and explanation to the problem for a better understanding. Thank you! For Carrot Corp, what is the debt to asset ratio? a. 25.52 : 1 b. 23.64 : 1 c. 20 : 1 d. 22.54 : 1

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter12: Corporations: Organization, Capital Structure, And Operating Rules

Section: Chapter Questions

Problem 4BCRQ

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