Question

Cullumber Enterprises has total current assets of $345,002 and fixed assets of $466,306. The company also has long-term debt of $287,400, $100,000 in its common stock account, and retained earnings of $187,570. What is the value of its total current liabilities

Answer 1

Answer: $236,338

Explanation:

The accounting equation is:

Assets = Equity + Liabilities

Assets = Fixed assets + Current Assets

Equity = Common stock + Retained earnings

Fixed assets + Current Assets = Common stock + Retained earnings + Long term debt + Current liabilities

466,306 + 345,002 = 100,000 + 187,570 + 287,400 + Current liabilities

811,308 = 574,970 + Current liabilties

Current liabilities = 811,308 - 574,970

= $236,338