Question

Glen, a CFO of a large corporation notes that the business’s current assets add up to $18,900. Additionally, there is a fleet of trucks which is listed as a $780,000 debit on the balance sheet (there is also $246,000 of accumulated depreciation). The only other asset is a building which is debited for $1,050,000 (104,000 of accumulated depreciation). The book value of the corporation’s shares is $920,000 while retained earnings currently have a $210,000 credit balance. How much, in total, does the corporation owe to banks, suppliers, and other parties?

Answer 1

Based on the company's assets and equity, the amount that it owes various stakeholders is $368,900

Amount owed by company

You can find this using the accounting formula:

Assets = Liabilities + Equity

Expanding the formula gives:

Current assets + Book value of fixed assets = Liabilities + Book value of shares + Retained earnings

18,900 + (780,000 - 246,000) + (1,050,000 - 104,000) = Liabilities + 920,000 + 210,000

Liabilities = 8,900 + (780,000 - 246,000) + (1,050,000 - 104,000)  - 920,000 - 210,000

= $368,900

In conclusion, liabilities are $368,900

Find out more on the accounting equation at brainly.com/question/1347011.