On June 30, the Simpson Company reported the following information on its balance sheet. $$\begin{array} { l r }
\hline\text { Total current assets } & \$ 550,000 \
\text { Total long-ter } \mathrm { m } \text { assets } & \$ 1,120,000 \
\text { Total cur rent liabilities } & \$ 484,000 \
\text { Total long-ter } \mathrm { m } \text { debt } & \$ 705,000 \
\hline
\end{array}$$ What is the amount of the stockholder's equity in the Simpson Company?
A) $481,000
B) $636,000
C) $965,000
D) There is not enough information to calculate stockholders' equity.

Question

On June 30, the Simpson Company reported the following information on its balance sheet. $$\begin{array} { l r } 
\hline\text { Total current assets } & \$ 550,000 \
\text { Total long-ter } \mathrm { m } \text { assets } & \$ 1,120,000 \
\text { Total cur rent liabilities } & \$ 484,000 \
\text { Total long-ter } \mathrm { m } \text { debt } & \$ 705,000 \
\hline
\end{array}$$ What is the amount of the stockholder's equity in the Simpson Company?
A) $481,000
B) $636,000
C) $965,000
D) There is not enough information to calculate stockholders' equity.

Quizplus · Accepted Answer

Stockholders' equity is calculated as total assets minus total liabilities. Total assets are $550,000 + $1,120,000 = $1,670,000. Total liabilities are $484,000 + $705,000 = $1,189,000. Therefore, stockholders' equity is $1,670,000 - $1,189,000 = $481,000.

On June 30, the Simpson Company Reported the Following Information