On December 31, 2009, Barton Incorporated Had Total Liabilities of $60,000

Essay

On December 31, 2009, Barton Incorporated had total liabilities of $60,000 and total shareholders' equity of $90,000, resulting in a debt/equity ratio of 0.67 before income tax expense is recognized. On December 31, 2009, Barton paid its 2009 income taxes of $6,000 while its income tax expense on its 2009 income statement was $8,000. This difference exists because Barton uses straight-line depreciation on its books and double-declining-balance depreciation on its tax returns. What is Barton's debt/equity ratio after the tax expense and deferred tax liability are recognized?