McGowen Industries has a debt-to-equity ratio of 0.75 to 1 and a times-interest-earned ratio of 10. For each transaction or change listed here, determine the effect on the debt-to-equity and times-interest-earned ratios. Consider each event by itself and fill in the blanks with I for increase, D for decrease, and NC for no change.

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A. Pay long-term liability. B. Purchase equipment for cash. Increase gross margin percentage. Increase inventory by purchasing on account. C. D. E. Decrease operating expenses as a percentage of sales. F. Issue additional capital stock for cash. G. Purchase buildings with partial payment and issue a mortgage payable for the balance. Debt-to- Equity Times Interest Earned