Question

A firm has common stock of $100, paid-in surplus of $370, total liabilities of $460, current assets of $490, and fixed assets of $700. what is the amount of the shareholders' equity?

Answer 1

Hi there

shareholders' equity=
(fixed assets+current assets)-liabilities

shareholders' equity=(700+490)−460
=730...answer

(Note that the amount of retained earnings is not provided so you must use total assets minus total liabilities to derive the correct answer)