Baron,Inc.has total current assets of $1,200,000; total current liabilities of $500,000; and long-term assets of $800,000.How much is the firm's Total Liabilities & Equity?
A) $2,500,000
B) $1,300,000
C) $2,000,000
D) $1,800,000

Question

Quizplus · Accepted Answer

Total Liabilities & Equity can be calculated as:

Total Liabilities & Equity = Total Current Liabilities + Long-term Liabilities + Shareholders Equity

Total Liabilities & Equity = $500,000 + 0 + ($1,200,000 - $500,000) + $800,000 
Total Liabilities & Equity = $2,000,000

Therefore, the best choice is C) $2,000,000 as it is the sum of all liabilities and shareholders equity.

Baron,Inchas Total Current Assets of $1,200,000; Total Current Liabilities of $500,000;