Jones Corp)an apparel company,has total assets worth $8,500.The owners' initial investment in Jones Corp.stood at $4,000,and profits that were not paid out to owners over time was at $2,000.Calculate the total liabilities.
A)$10,500
B)$6,500
C)$4,500
D)$2,500

Question

Quizplus · Accepted Answer

Total liabilities can be calculated using the accounting equation: Assets = Liabilities + Equity. Here, Equity is the sum of the owners' initial investment and retained profits, which is $4,000 + $2,000 = $6,000. Therefore, Liabilities = Assets - Equity = $8,500 - $6,000 = $2,500.

Jones Corp)an Apparel Company,has Total Assets Worth $8,500