On June 1st,a hotel's balance sheet shows assets of $6,400,000 and owners' equity of $2,000,000.What is the amount of the hotel's liabilities?

Question

Quizplus · Accepted Answer

Using the fundamental accounting equation: Assets = Liabilities + Owners' Equity
We can rearrange it to: Liabilities = Assets - Owners' Equity
Therefore, the amount of liabilities would be:
Liabilities = $6,400,000 - $2,000,000
Liabilities = $4,400,000
Thus, the answer is choice B.

On June 1st,a Hotel's Balance Sheet Shows Assets of $6,400,000