Murphy Corporation's end-of-year balance sheet consisted of the following amounts: ?

$$\begin{array} { l r l r }
\text { Cash } & \$ 35,000 & \text { Accounts receivable } & \$ 46,000 \
\text { Property, plant, and equipment } & 69,000 & \text { Long-term debt } & 41,000 \
\text { Capital stock } & 107,000 & \text { Accounts payable } & 22,000 \
\text { Retained earnings } & ? & \text { Inventory } & 33,000
\end{array}$$
What is Murphy's owners' equity balance at the end of the current year?
A)$3,000
B)$120,000
C)$63,000
D)$173,000

Question

Murphy Corporation's end-of-year balance sheet consisted of the following amounts: ?
 
$$\begin{array} { l r l r } 
\text { Cash } & \$ 35,000 & \text { Accounts receivable } & \$ 46,000 \
\text { Property, plant, and equipment } & 69,000 & \text { Long-term debt } & 41,000 \
\text { Capital stock } & 107,000 & \text { Accounts payable } & 22,000 \
\text { Retained earnings } & ? & \text { Inventory } & 33,000
\end{array}$$  
What is Murphy's owners' equity balance at the end of the current year?
A)$3,000
B)$120,000
C)$63,000
D)$173,000

Quizplus · Accepted Answer

Owners' equity is calculated as total assets minus total liabilities. Total assets = Cash + Accounts receivable + Property, plant, and equipment + Inventory = $35,000 + $46,000 + $69,000 + $33,000 = $183,000. Total liabilities = Long-term debt + Accounts payable = $41,000 + $22,000 = $63,000. Owners' equity = Total assets - Total liabilities = $183,000 - $63,000 = $120,000.

Murphy Corporation's End-Of-Year Balance Sheet Consisted of the Following Amounts