Question

The balance sheet for Shaver Corporation reported the following: cash, $5,000; short-term investments, $10,000; net accounts receivable, $35,000; inventories, $40,000; prepaids, $10,000; equipment, $100,000; current liabilities, $40,000; notes payable (long-term), $70,000; total stockholders’ equity, $90,000; net income, $3,320; interest expense, $4,400; income before income taxes, $5,280.

Answer 1

The total stockholders' equity is $90,000, which represents the owners' investment in the company.

A balance sheet is a financial statement that shows a company's financial position at a specific point in time. It consists of two main sections: assets and liabilities.

In this case, the balance sheet for Shaver Corporation shows:

Cash: $5,000

Short-term investments: $10,000

Net accounts receivable: $35,000

Inventories: $40,000

Prepaids: $10,000

Equipment: $100,000

On the liabilities side:

Current liabilities: $40,000

Notes payable (long-term): $70,000

The total stockholders' equity is $90,000, which represents the owners' investment in the company.