Baron,Inc.has total current assets of $1,200,000; total current liabilities of $500,000; long-term assets of $800,000; and long-term debt of $600,000.How much is the firm's total equity?
A) $1,200,000
B) $800,000
C) $900,000
D) $2,000,000

Question

Quizplus · Accepted Answer

Total equity can be calculated by subtracting total liabilities from total assets. Total assets = current assets + long-term assets = $1,200,000 + $800,000 = $2,000,000. Total liabilities = current liabilities + long-term debt = $500,000 + $600,000 = $1,100,000. Total equity = $2,000,000 - $1,100,000 = $900,000. Therefore, choice C is correct.

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