Emmitt had the following final balances after the first year of operations: assets,$55,000; stockholders' equity,$25,000; dividends,$3,000; and net income,$10,000.What is the amount of Emmitt's liabilities?

Question

Quizplus · Accepted Answer

The accounting equation is Assets = Liabilities + Stockholders' Equity. Given assets are $55,000 and stockholders' equity is $25,000, liabilities can be calculated as $55,000 - $25,000 = $30,000. Dividends and net income are not needed to calculate liabilities in this context.

Emmitt Had the Following Final Balances After the First Year