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The income statement for the year ended December 31, 20X6, for Total Inc. contains the following information: Total Inc. Income Statement Year Ended December 31,

The income statement for the year ended December 31, 20X6, for Total Inc. contains the following information: Total Inc. Income Statement Year Ended December 31, 20X6

Sale $50,000
Cost of goods sold $30,000
Gross Profit $20,000
Operating Expenses $15,000
Profit from Operations $5,000
Income Tax Expense $3,000
Profit $2,000

Total Inc. comparative balance sheet at December 31

20X6 20X5
Cash $1,200 $1,000
Accounts Receivable $300 $1,500
Inventory $5,000 $3,000
Equipment $12,000 $8,000
Accumulated Depreciation - equipment $(4,000) $(2,000)
Total Assets $14,500 $11,500
Account Payable $1,000 $3,500
Long-term Notes Payable $2,000 $-
Common shares $10,000 $8,000
Retained Earnings $1,500 $-
Total Liabilities & Shareholders' Equity $14,500 $11,500

Additional Information: 1. Operating expenses include depreciation expense of $2,500 2. Accounts Payable related to the purchase of inventory 3. Equipment that cost $2,000 was sold for $1,500 cash 4. New equipment was purchased during the year for $5,000 5. Common shares were sold for $2,000 cash Round answers to fit 2 decimal places in all questions (in % questions a 0.12 is presented as 12%, so a 0.124 is rounded as 12% and 0.127 is rounded as 13%)

The equity ratio at December 20X5 was:

Between 0.62 and 1.67

Equal or above 1.68

Equal or below 0.40

Not enough data provided to calculate it

Between 0.41 and 0.61

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