Question

On May 31 of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of stockholders’ equity as of May 31 of the current year?

Answer 1

Answer:

$31,100

Explanation:

On May 31 of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300.

Therefore the amount of stockholders’ equity as of May 31 of the current year can be derived by the formula : Capital = Assets - Liabilities

Assets

Cash $20,500;

Accounts Receivable, $7,250;

Supplies, $650;

Equipment, $12,000

TOTAL = 40,400

Liabilities

Accounts Payable, $9,300.

Therefore stockholders’ equity = 40,400 - 9,300 = $31,100