Question

Vaughan Interiors needs help determining the Stockholders' Equity Account. Current account balances are: Cash $25,050, Accounts Receivable $12,400, Equipment $40,000, Accumulated Depreciation $22,750, Accounts Payable $15,750, Salaries Payable $12,150. What is the Stockholders' Equity Account Balance

Answer 1

Answer:

$1,750

Explanation:

Stockholder's equity would be calculated as;

= Current assets balance + Fixed asset balance - Current liability balance

Current assets balance = Cash $25,050 + Accounts receivable $12,400

Fixed assets = Equipment $40,000 - Accumulated depreciation $22,750 = $17,250

Current liability = Accounts payable $15,750 + Salaries payable $12,150 = $27,900

Therefore,

Stockholder equity account balance

= $12,400 + $17,250 - $27,900

= $1,750