Question

ABC company had the following final balances after the first year of operations: assets, $35,000; stockholders' equity, $14,200; dividends, $2,600; and net income, $10,900. What is the amount of ABC's liabilities?

Answer 1

$12,500

Step-by-step explanation:

We will get the value for ABC's liabilities using the accounting equation.

Assets = liabilities + Equity

Given that;

Stockholder's equity = $14,200

Net income = $10,900

Dividends = ($2,600)

Total equity = $22,500

Assets = $35,000

Recall that ;

Assets = Liabilities + Equity

$35,000 = Liabilities + $22,500

Liabilities = $35,000 - $22,500

Liabilities = $12,500

ABC's liabilities is $12,500