ASSETS MEGAFRAME COMPUTER COMPANY Balance Sheet As of December 31 Cash Accounts receivable Inventory Net plant and equipment Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 50,000 70,000 110,000 220,000 $ 450,000 $ 70,000 50,000 Accrued expenses Long-term debt Common stock Paid-in capital Retained earnings Total liabilities and stockholders' equity MEGAFRAME COMPUTER COMPANY Income Statement 130,000 70,000 40,000 90,000 $ 450,000 For the year ended December 31 Sales (all on credit) $ 875,000 Cost of goods sold 600,000 Gross profit $ 275,000 Sales and administrative expenses 30,000 Depreciation 55,000 Operating profit $ 190,000 Interest expense 25,000 Profit before taxes $ 165,000 Taxes (30%) 49,500 Net income $ 115,500 Refer to the tables above. The firm's debt to total assets ratio is 56.1 26.7 28.6 55.6