Refer to the information above.If the Cash balance at December 31,2018 is $62,500 then Total Liabilities amounts to:
A)$ 42,500.
B)$140,000.
C)$ 45,000.
D)$182,500.

Question

Quizplus · Accepted Answer

Using the accounting equation, Total Assets = Total Liabilities + Stockholders' Equity, and the given information, we can solve for Total Liabilities.
Total Assets = $207,000
Stockholders' Equity = $99,000
Total Liabilities = Total Assets - Stockholders' Equity
Total Liabilities = $207,000 - $99,000
Total Liabilities = $108,000
However, we are given that the Cash balance at December 31, 2018 is $62,500. Therefore,
Total Liabilities = $108,000 - $62,500
Total Liabilities = $45,500
Therefore, the best choice is C, with a Total Liabilities amount of $45,000.

Refer to the Information Above