The classified balance sheet for a company reported current assets of $811,925,total liabilities of $399,770,Common Stock of $500,000,and Retained Earnings of $65,130.The current ratio was 2.5. Which of the following statements is not correct?
A)Total Assets are $964,900.
B)Total Stockholders' equity is $565,130.
C)Noncurrent liabilities are $65,130.
D)The amount of current assets is 2.5 times the amount of current liabilities.

Question

Quizplus · Accepted Answer

Total assets = Total liabilities + Total stockholders' equity
= $399,770 + $500,000 + $65,130 = $964,900 (correct)
Total stockholders' equity = Common Stock + Retained Earnings
= $500,000 + $65,130 = $565,130.(correct)
Noncurrent liabilities = Total liabilities - Current liabilities
= $399,770- $324,770 = $75,000
Current ratio = Current assets ÷ Current liabilities
Current liabilities = Current assets ÷ Current ratio
= $811,925 ÷ 2.5 = $324,770 (correct)

The Classified Balance Sheet for a Company Reported Current Assets