The balance sheet of Incrad Clothes,LLC,as of December 31,2017 is presented below. $$\begin{array} { | l | r | l | r | }
\hline \text { Assets } & & \text { Liabilities } & \
\hline \text { Cash } & \$ 15,000 & \text { Accounts payable } & \$ 12,000 \
\hline \text { Merchandise inventory } & 56,000 & \text { Bank Loan } & 25,000 \
\hline \text { Furniture } & 12,000 & \text { Partner's Equity } & \
\hline \text { Computer } & 15,000 & \text { Chad, Capital } & 45,000 \
\hline \text { Other assets } & \underline { 22,000 } & \text { Brad, Capital } & \underline { 38,000 } \
\hline& & \text { Total Liabilities and } & \
{ \text { Total Assets } } & \$ 120,000& \text { Partner's Equity } & \$ 120,000 \
\hline
\end{array}$$ Which of the following statements is TRUE regarding Incrad's balance sheet?

Question

The balance sheet of Incrad Clothes,LLC,as of December 31,2017 is presented below. $$\begin{array} { | l | r | l | r | } 
\hline \text { Assets } & & \text { Liabilities } & \
\hline \text { Cash } & \$ 15,000 & \text { Accounts payable } & \$ 12,000 \
\hline \text { Merchandise inventory } & 56,000 & \text { Bank Loan } & 25,000 \
\hline \text { Furniture } & 12,000 & \text { Partner's Equity } & \
\hline \text { Computer } & 15,000 & \text { Chad, Capital } & 45,000 \
\hline \text { Other assets } & \underline { 22,000 } & \text { Brad, Capital } & \underline { 38,000 } \
\hline& & \text { Total Liabilities and } & \
 { \text { Total Assets } }  & \$ 120,000& \text { Partner's Equity } & \$ 120,000 \
\hline 
\end{array}$$ Which of the following statements is TRUE regarding Incrad's balance sheet?

Quizplus · Accepted Answer

The partnership is organized as a Limited Liability Company (LLC), which means that the owners, Brad and Chad, have limited liability for the company's debts. This is one of the main benefits of organizing a business as an LLC. Option A cannot be determined from the balance sheet. Option B is false, as the bank loan is considered a liability and not part of the Partner's Equity. Option D also cannot be determined from the balance sheet.

The Balance Sheet of Incrad Clothes,LLC,as of December 31,2017 Is