Question

Midyear on july 31st, the chester corporation's balance sheet reported: total assets of $82.891 million total common stock of $2.540 million cash of $4.020 million retained earnings of $17.857 million. what were the chester corporation's total liabilities?

Answer 1

Calculation of Chester Corporation’s total liabilities:

Total Liabilities can be calculated using the basic accosting equation:

Liabilities = Assets – Equity

Assets are given $82.891

And Equity can be calculated as follows:

Equity = Common Stock + retained earnings = 2.540+17.857 = $20.397

Now we can calculate Total Liabilities can be using the basic accosting equation as follows:

Liabilities = Assets – Equity

= 82.891-20.397 = $62.494

Chester Corporation’s total liabilities are $62.494