A balance sheet balances assets with their sources of debt and equity financing

Finance Dec 24, 2020

A balance sheet balances assets with their sources of debt and equity financing. If a corporation has assets equal to $6,100,000 and a debt ratio of 44%, how much debt does the corporation have on its books? The amount of debt the corporation has on its books is (Round to the nearest dollar.)

Expert Solution

Debt ratio = Amount of debt/Total asset

Debt ratio = 44%

Amount of debt = ?

Total asset = $ 6,100,000

Thus 44% = Amount of debt/6100000

Amount of debt = 6100000 x 44%

= 2,684,000 $

Thus Amount of debt corporation has on it's books is $2684000

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