Shareholders' equity for Raisin Corporation on January 1, 2014 and December 31, 2014 were $60,000 and $75,000, respectively. Assets on January 1, 2014 and December 31, 2014 were $115,000 and $105,000, respectively. Liabilities on January 1, 2014 were $55,000. What is the amount of liabilities on December 31, 2014?

Question

Quizplus · Accepted Answer

The formula for calculating shareholders' equity is:
Shareholders' equity = Assets - Liabilities
Using the information given, we can calculate the shareholders' equity for December 31, 2014:
$75,000 (shareholders' equity) = $105,000 (assets) - Liabilities
Rearranging this equation, we get:
Liabilities = Assets - Shareholders' equity
Therefore, Liabilities = $105,000 - $75,000 = $30,000. The correct answer is (C) $30,000.

Shareholders' Equity for Raisin Corporation on January 1, 2014 and December