If total liabilities are $120 000,total assets are $280 000 and total paid-up capital is $140,000,the amount of retained earnings is:

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Quizplus · Accepted Answer

Retained earnings can be calculated using the accounting equation: Assets = Liabilities + Equity. Here, Equity is the sum of paid-up capital and retained earnings. So, $280,000 (Assets) = $120,000 (Liabilities) + $140,000 (Paid-up Capital) + Retained Earnings. Solving for retained earnings gives $20,000.

If Total Liabilities Are $120 000,total Assets Are $280 000