As of December 31,2016,Bristol Company had $100,000 of assets,$40,000 of liabilities and $25,000 of retained earnings.What percentage of Bristol's assets were obtained through investors?
A)60%
B)25%
C)40%
D)35%

Question

Quizplus · Accepted Answer

The percentage of assets obtained through investors is calculated by finding the equity portion of the assets. Equity is calculated as Assets - Liabilities, which is $100,000 - $40,000 = $60,000. Retained earnings are $25,000, so the contributed capital (investors' portion) is $60,000 - $25,000 = $35,000. The percentage is ($35,000 / $100,000) * 100% = 35%.

As of December 31,2016,Bristol Company Had $100,000 of Assets,$40,000 of Liabilities