Question

The total assets of Lantz Co. are $810,000 and its liabilities are equal to one-fourth of its total assets. What is the amount of Lantz Co.’s stockholders’ equity?

Answer 1

$607,500

Step-by-step explanation:

Given;

Total asset = $810,000

Total liabilities is one-fourth of its total assets

Therefore total liabilities = (1/4) × $810,000

= $202,500

Using the accounting formula

Total asset - total liabilities = stockholders’ equity

stockholders’ equity = $810,000 - $202,500

= $607,500

The stockholders’ equity of Lantz Co.’s amounts to $607,500.