Question

Dimeback, inc., is obligated to pay its creditors $5,800 during the year. (leave no cells blank - be certain to enter "0" wherever required.

a.
what is the market value of the shareholders' equity if assets have a market value of $7,100?
market value
$
b.
what is the market value of the shareholders' equity if assets equal $5,200?
market value

Answer 1

a. 1300

b. 0

Step-by-step explanation:

a. 7100 - 5800 = 1300

b. If there is no profit, the shareholders make no money. Therefore, 0.

Answer 2

a. The market value of the equity if the asset is 7100 is
7100 - 5800 = 1300
b. The market value of the equity if the asset is 5200 is
5200 - 5800 = -600
A negative equity means that the company is in debt.