Question

Have I answered this question correctly? If not what is the correct answer and why.Calculate the equity

ratio based on the following information: cash = $14,870; accounts receivable = $22,108; prepaid $3,010; supplies = $927; equipment = $62,150; accumulated depreciation = 13,750; accounts payable = 28,000. Round to two decimal places.

The Answer is: 68.65% or 0.68  

The formula for Equity Ratio is:

Equity Ratio = Total Equity

                          Total Assits

Cash$14,870
Accounts Receivable $22,108

Supplies$     927

Prepaid$ 3,010

Equipment$62,150

Accum Deprecation   ($13,750)                         

Total  Assets$89,315

Accounts Payable $28,000

Total Liabilities$28,000

Assets – Liabilities = Equity

$89,315 – $28,000  = $61,315

Equity Ratio = Total Equity $61,315

                          Total Assets $89,315   = 0.6865028 x 100 – 68.65028 % rounded to 68.65%

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