Sumner sold equipment that it uses in its business for $31,200. Sumner bought the equipment a few years ago for $79,400 and has claimed $39,700 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss

Particulars                                   Amount

Purchase price of equipment   $79,400

Less: Depreciation expenses   $39,700

Value of equipment                  $39,700

Particulars                                   Amount

Sales price of equipment          $31,200

Value of equipment                   $39,700

Section 1231 Ordinary loss     -$8,500

b. Debt ratio

Explanation:

The liquidity ratio includes the current ratio, quick ratio, etc

where,  

Current ratio = Total Current assets ÷ total current liabilities

And, Quick ratio = Quick assets ÷ total current liabilities  

where,  

Quick assets = Cash and cash equivalents + short-term investments + Accounts receivable (net)  

These two ratios check the liquidity of the business organization whereas debt ratio shows a relationship between the total liabilities and the total assets. It checks the leverage of the firm whether it is capable to repay the borrowed amount or not

Hence, option b is correct