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7 November, 23:19

Nash's Trading Post, LLC has assets of $4200000, common stock of $1000000, and retained earnings of $600000. What are the creditors' claims on their assets?

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  1. 8 November, 02:03
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    The correct answer is $2,600,000.

    Explanation:

    According to the scenario, the given data are as follows:

    Total Assets = $4,200,000

    Common stock = $1,000,000

    Retained earnings = $600,000

    So, we can calculate the creditors' claims on their assets by using following formula:

    Creditor's Claim on their Assets = Total Assets - (Common stock + Retained earnings)

    = $4,200,000 - ($1,000,000 + $600,000)

    = $4,200,000 - $1,600,000

    = $2,600,000

    Hence, Creditors' claims on their assets will be $2,600,000.
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