Question

Sunlight Company has assets and equity that amount to $200,000 and $80,000​, respectively.

Liabilities total​ ________.

A. $120,000
B. $80,000
C. $200,000
D. $280,000

Answer 1

The Sunlight Company's liabilities are calculated as the difference between the company's total assets ($200,000) and equity ($80,000), resulting in liabilities of $120,000. Thus, the correct answer is A. $120,000.

Step-by-step explanation:

The Sunlight Company's liabilities can be calculated using the basic accounting equation: Assets = Liabilities + Equity. From the information provided, we know that the Sunlight Company has total assets amounting to $200,000 and equity of $80,000.

To find the liabilities, we rearrange the equation to solve for liabilities: Liabilities = Assets - Equity. Thus, the liabilities of Sunlight Company are $200,000 (assets) - $80,000 (equity), which equals $120,000. Therefore, the correct answer is A. $120,000.

In order to determine the total liabilities of Sunlight Company, we need to subtract the equity from the total assets. Given that the assets amount to $200,000 and the equity is $80,000, we subtract $80,000 from $200,000 to find that the liabilities equal $120,000. Therefore, the answer is option A. $120,000.