Question

United Airlines' 2012 balance sheet reported the following (in millions) Total Assets $40,091 Total Liabilities 31,485 Contributed Capital 3,573 What was United Airlines' total liabilities and stockholders' equity at December 31, 2016?

Select one:
A. $40,091 million
B. $36,518 million
C. $ 8,606 million
D. $35,058 million
E. $36,518 million

Answer 1

C. $ 8,606 million

Step-by-step explanation:

By the accounting equation you now that :

Total Assets = (Total Liabilities + Owner’s Equity)

In this case it´s

$40,091 = $31,485 + $8,606

It means that the company works with total assets, but it needs to finance these assets through liabilities (mainly suppliers of any kind) and equity, which is the money that the owner put in the company hoping to make a profit.