Question

Use the following information to determine Total Stockholders' Equity:Total Assets $85,000Total Liabilities 21,000Total Stockholders' Equity xTotal Retained Earnings 9,000a.$55,000b.$58,000c.$40,000d.$64,000

Answer 1

The correct answer is a. $55,000.

Step-by-step explanation:

This problem requires us to calculate the total stockholders' equity. Total of assets, liabilties and retain earnings is given in the question. We can calculate the stock amount by using simple balance sheet equation that is given below.

Total Assets = Total laibilities + Retain earnings + Equity

Equity = $ 85,000 - $ 21,000 - $ 9000

Total Stockholders' Equity = $ 55,000