Home/ Questions/Q 27438
Next
Answered

SIKSHAPATH Latest Questions

Pavanagg
  • 1
  • 1
Asked: 2024-07-08T01:40:51+05:30 In:

If Boward Co. has Common Stock of $40,000, total assets of $85,000, and total liabilities of $35,000, its Retained Earnings equals

  • 1
  • 1

If Boward Co. has Common Stock of $40,000, total assets of $85,000, and total liabilities of $35,000, its Retained Earnings equals:

  1. $55,000.
  2. $45,000.
  3. $50,000.
  4. $10,000.
economics
Share

    1 Answer

    2. ADMIN 2
      Best Answer
      This answer was edited.
      We know that:
      Total Assets = Total Liabilities + Stockholders’ Equity
       
      Given:
      $85,000 = $35,000 + Stockholders’ Equity
       
      Calculate Stockholders’ Equity:
      Stockholders’ Equity = $85,000 – $35,000
      Stockholders’ Equity = $50,000
       
      Next, we know:
      Stockholders’ Equity = Common Stock + Retained Earnings
       
      Given:
      $50,000 = $40,000 + Retained Earnings
       
      Calculate Retained Earnings:
      Retained Earnings = $50,000 – $40,000
      Retained Earnings = $10,000
       
      Answer: Option D – $10,000

    Leave an answer

    You must login to add an answer.

    Need An Account,