Use the following to answer the given question

BALANCE SHEET:

Ordinary share capital————#100,000; _______ Plant and Machinery ——–#60,000

6% preference share capital—— #60,000; _______  Furniture——————— #50,000

Reserve—————————- #20,000; ________ Motor van ——————– #68,000

————————————– #180,000; _______ Stock ————————– #14,000

10% Debentures ——————  #40,000; _______ Debtors————————- #36,000

Creditors————————- — #25,000;  ______  Prepyments ——————— #1,800

Accrued Rent———————- #3,000; ________ Bank —————————- #18,200

Total —————————–  #248,000; _______ Total —————————– #248,000

 

Use the following to answer the given question, what is the ratio of debentures to equity?

A. 1 : 1
B. 2 : 1
C. 3 : 1
D. 5 : 2
E. 6.8 : 7

Correct Answer: Option D

D. 5 : 2