Question

Use the following information for Meeker Corp. to determine the amount of equity to report.

Cash $70,000
Buildings $125,000
Land $205,000
Liabilities $130,000

A) $530,000.
B) $20,000.
C) $140,000.
D) $270,000.
E) $390,000.

Answer 1

To find Meeker Corp's equity, calculate the total assets ($400,000) by summing cash, buildings, and land, then subtract total liabilities ($130,000) from it, resulting in $270,000 (Option D).

Step-by-step explanation:

To determine the amount of equity to report for Meeker Corp, we need to calculate the difference between the company's total assets and its liabilities. Equity can be found by using the equation Equity = Total Assets - Total Liabilities. In this scenario, Meeker Corp has assets that include Cash of $70,000, Buildings valued at $125,000, and Land valued at $205,000. The total liabilities are reported to be $130,000.

First, we will calculate the total assets:

• Cash: $70,000
• Buildings: $125,000
• Land: $205,000

Adding these figures up gives us a total assets value of $400,000 ($70,000 + $125,000 + $205,000).

Next, subtract the total liabilities from the total assets to find the equity:

Total Assets ($400,000) - Total Liabilities ($130,000) = Equity ($270,000)

Therefore, the correct answer is Option D: $270,000.