Question

Siskiyou, inc. Has total current assets of $1,200,000; total current liabilities of $500,000; and long term assets of $800,000. How much is the firm's total liabilities & equity?

Answer 1

the firm's total liabilities & equity is $2,000,000.

Given,

total current assets = $1,200,000

long-term assets = $800,000

total current liabilities = $500,000

Using the Accounting equation:

Assets = Liabilities + Equity

Now, substituting the values in the above equation.

Also. remember total assets include both current and long term assets.

Therefore, $1,200,000 + $800,000 = Liabilities + Equity

Liabilities + Equity = $2,000,000

The entire assets of a corporation are equal to the sum of its liabilities and shareholders' equity, according to the accounting equation.

Hence, the firm's total liabilities & equity is $2,000,000.

Learn more about Accounting equation:

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