Question

Shareholders' equity for Raisin Corporation on January 1, 2017 and December 31, 2017 were $60,000 and $75,000, respectively. Assets on January 1, 2017 and December 31, 2017 were $115,000 and $105,000, respectively. Liabilities on January 1, 2017 were $55,000. What is the amount of liabilities on December 31, 2017?

a) $15,000
b) $55,000
c) $40,000
d) $30,000

Answer 1

The amount of liabilities on December 31, 2017 for Raisin Corporation is calculated using the accounting equation, resulting in $30,000, which is option d).

Step-by-step explanation:

To determine the amount of liabilities on December 31, 2017 for Raisin Corporation, we can use the basic accounting equation: Assets = Liabilities + Shareholders' Equity. We know that the shareholders' equity at the end of the year was $75,000, and the assets were $105,000. Thus, we can calculate the liabilities as follows:

Liabilities = Assets - Shareholders' Equity

Liabilities on December 31, 2017 = $105,000 - $75,000 = $30,000

Therefore, the correct answer is d) $30,000.