Question

Total assets of Charter Company equal $700,000 and its equity is $420,000. What is the amount of its liabilities? b. Total assets of Martin Marine equal $500,000 and its liabilities and equity amounts are equal to each other. What is the amount of its liabilities? What is the amount of its equity?

Answer 1

Answer:

a. Total liabilities = $280,000

b. Total liabilities = $250,000

Total equity -= $250,000

Explanation:

As we know that

Total assets = Total liabilities + shareholder equity

So in the first case

The amount of the liabilities is

Total liabilities = Total assets - Total equity

                        = $700,000 - $420,000

                        = $280,000

And, in the second case, the total assets is $500,000

And, the liabilities and equity amounts are equal to each other

So in this case, the liabilities is $250,000 and the equity is $250,000