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
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