Falmouth Corporation's debt to equity ratio is 0.6.Current liabilities are $120,000, long term liabilities are $360,000, and working capital is $140,000.Total assets of the corporation must be:

A) $600,000
B) $1,200,000
C) $800,000
D) $1,280,000

Debt to Equity ratio = Total liabilities / Total equity

Let's assume the total equity as "x"

0.6 = (120,000 + 360,000) / x

x = 800,000

Working Capital = Current Assets - Current Liabilities

We know that Working Capital is $140,000 and Current Liabilities are $120,000. Hence, Current Assets would be $260,000

Total Assets = Total Liabilities + Total Equity

Total Liabilities = 120,000 + 360,000 = $480,000

Total equity = $800,000

Total Assets = $480,000 + $800,000 = $1,280,000

Therefore, the total assets of the corporation must be $1,280,000, which is option D.

Debt-to-equity ratio = Total liabilities ÷ Stockholders' equity
0.6 = ($120,000 + $360,000)÷ Stockholders' equity
Stockholders' equity = $480,000 ÷ 0.6 = $800,000
Total assets = Total liabilities + Stockholders' equity
= $480,000 + $800,000 = $1,280,000