If the total assets of a business are $107,000 and its liabilities are $75,000, which of the following statements is correct?

a. liabilities are $32,000

b. liabilities are $42,000

c. liabilities are $57,000

d. liabilities are $98,000

Question

Business

Dominique Cordova

2 May, 18:10

If the total assets of a business are $107,000 and its liabilities are $75,000, which of the following statements is correct?

a. liabilities are $32,000

b. liabilities are $42,000

c. liabilities are $57,000

d. liabilities are $98,000

+5

Answers (1)

Know the Answer?

Sloan · Answer 1

a. liabilities are $32,000

Explanation:

Note: In question part $75,000 shall represent equity, as there are only 3 parts of balance sheet assets, equity and liabilities, if assets are given liabilities is what we need to calculate the missing is equity.

Thus, $75,000 is treated as equity.

In that case we have,

Assets = Equity + Liabilities

$107,000 = $75,000 + Liabilities

Assets - Equity = Liabilities

$107,000 - $75,000 = Liabilities

$32,000 = Liabilities

Therefore, correct option is

a. liabilities are $32,000

If the total assets of a business are $107,000 and its liabilities are $75,000, which of the following statements is correct?a. liabilities are $32,000b. liabilities are $42,000c. liabilities are $57,000d. liabilities are $98,000

If the total assets of a business are $107,000 and its liabilities are $75,000, which of the following statements is correct?

a. liabilities are $32,000

b. liabilities are $42,000

c. liabilities are $57,000

d. liabilities are $98,000