URGENT!!!!!!!! Please help.

At the end of last month, Paarl Manufacturing had $45,965 in the bank. It owed the bank $224,500 for their mortgage. It also had a working capital loan of $28,500. Its customers owed $22,941and it owed its suppliers $12,991.The company owned property worth $252,000. It had $120,500 in finished goods, $101,500 in raw materials, and $42,000 in work in progress. Its production equipment was worth $458,000 when new (partially paid for by a large government loan due to be paid back in three years) but had accumulated a total of $242,000 in depreciation$32,500 worth last month. The company has investors who put up $103,000 for their ownership. It has been reasonably profitable; this month the gross income from sales was $217,000, and the costs associated with sales was only $38,500. Expenses were also relatively low; salaries were $44,000 last month, while the other expenses were depreciation, maintenance at $1580, advertising at $3350,and insurance at $310. In spite of $32,910 in accrued taxes (Paarl pays taxes at 45 percent), the company had retained earnings of $137,000.

Construct a balance sheet (as of the end of this month) and income statement (for this month) for Paarl Manufacturing. Should the company release some of its retained earnings through dividends at this time? First, construct a balance sheet as of the end of this month. Start with the assets section of the balance sheet and then the liabilities and owners' equity sections.

Now determine whether the company should release some of its retained earnings through dividends at this time by calculating the equity ratio

The equity ratio is

enter your response here.

(Round to three decimal places as needed.)

Should the company release some of its retained earnings through dividends at this time?

A.

Since the equity ratio is high, the company has too much debt. The company should not issue dividends so it can reduce its debt.

B.

Since the equity ratio is low, the company has too much debt. The company should not issue dividends so it can reduce its debt.

C.

Since the equity ratio is low, the company has a low amount of debt. The company should issue dividends to make its shareholders happy.

D.

Since the equity ratio is high, the company has a low amount of debt. The company should issue dividends to make its shareholders happy.

At the end of last month, Paarl Manufacturing had $45,965 in the bank. It owed the bank $224,500 for their mortgage. It also had a working capital loan of $28,500. Its customers owed $22,941 and it owed its suppliers $12,991. The company owned property worth $252,000. It had $120,500 in finished goods, $101,500 in raw materials, and $42,000 in work in progress. Its production equipment was worth $458,000 when new (partially paid for by a large government loan due to be paid back in three years) but had accumulated a total of $242,000 in depreciation$32,500 worth last month. The company has investors who put up $ 103,000 for their ownership. It has been reasonably profitable; this month the gross income from sales was $217,000, and the costs associated with sales was only $38,500. Expenses were also relatively low; salaries were $44,000 last month, while the other expenses were depreciation, maintenance at $1580, advertising at $3350, and insurance at $310. In spite of $32,910 in accrued taxes (Paarl pays taxes at 45 percent), the company had retained earnings of $137,000. Construct a balance sheet (as of the end of this month) and income statement (for this month) for Paarl Manufacturing. Should the company release some of its retained earnings through dividends at this time? First, construct a balance sheet as of the end of this month. Start with the assets section of the balance sheet and then the liabilities and owners' equity sections. Balance Sheet Paarl Manufacturing As of the end of the month Assets Current assets Cash 45965 Accounts receivable 22941 120500 Finished goods Raw materials 101500 Work in progress 42000 Total Current Assets 332906 Long-term assets Property Equipment Less accumulated depreciation Total Long-Term Assets Total assets Liabilities and Owners' Equity Current Liabilities Working capital loan Accounts payable Accrued taxes Total Current Liabilities Long-term Liabilities Government loan Mortgage loan Total Long-Term Liabilities Total Liabilities Owners' Equity Common shares Retained earnings Total Owners' Equity Total Liabilities and Owners' Equity Now, construct an income statement for this month. (Use parentheses or a minus sign for a net loss.) Income Statement Paarl Manufacturing for the month ended Revenues Gross income from sales Less cost of goods sold Net income from sales Expenses Advertising Depreciation Salaries Insurance Maintenance Total expenses Income before taxes Taxes Net income Now determine whether the company should release some of its retained earnings through dividends at this time by calculating the equity ratio. The equity ratio is (Round to three decimal places as needed.) Should the company release some of its retained earnings through dividends at this time? O A. Since the equity ratio is high, the company has too much debt. The company should not issue dividends so it can reduce its debt. O B. Since the equity ratio is low, the company has too much debt. The company should not issue dividends so it can reduce its debt. OC. Since the equity ratio is low, the company has a low amount of debt. The company should issue dividends to make its shareholders happy. OD. Since the equity ratio is high, the company has a low amount of debt. The company should issue dividends to make its shareholders happy