Thirty percent of the total assets of Shanahan Corporation have been financed through borrowing. The total liabilities of the company are $600,000. What is the amount of equity?

Question

Quizplus · Accepted Answer

If 30% of the total assets are financed through borrowing, then liabilities are 30% of total assets. Given liabilities are $600,000, total assets are $600,000 / 0.3 = $2,000,000. Equity is total assets minus liabilities: $2,000,000 - $600,000 = $1,400,000.

Thirty Percent of the Total Assets of Shanahan Corporation Have