Essay
Given the following data:Dec. 31,Year 2 Dec. 31,Year 1Total liabilities $128,250 $120,000Total owner's equity 95,000 80,000
(a) Compute the ratio of liabilities to owner's equity for each year.
(b) Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?
Correct Answer:
Verified
Correct Answer:
Verified
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