Question

Bear Tracks, Inc., has current assets of $2,280, net fixed assets of $10,400, current liabilities of $1,405, and long-term debt of $4,090.What is the value of the shareholders' equity account for this firm?

Answer 1

Answer: $7185

Explanation: Shareholders equity refers to the amount of funds that are collected by the company by selling their ownership rights in the market to the general investors.

As per the subject matter of accounts, every asset that is owned by an organisation is either financed by the available funds or some liability is taken to buy it. This could be illustrated as follows :-

assets =  shareholders equity + liabilities

Putting the values into equation we get :-

$2280 + $ 10,400 = $1,405 + $4090 + shareholders equity

therefore :-

shareholders equity = $7185