Selected information from Ingot Company’s financial statements for the year ended December 31, 20X4, was as follows prior to the consideration of its impaired asset write-down (in $):
A. increase from 0.44 to 0.51. B. decrease from 0.44 to 0.40. C. increase from 0.44 to 0.48.
The write-down of the excavation machine in the amount of ((($1,600,000 − $800,000) − $500,000) =) $300,000 decreases retained earnings from $490,000 to $190,000. The total debt to equity ratio increases from (($290,000 + $740,000) / ($290,000 + $740,000 + $800,000 + $490,000) =) 0.44 to (($290,000 + $740,000) / ($290,000 + $740,000 + $800,000 + $190,000) =) 0.51.
