Question

If total assets = 200 and the company has long term debt = 30 and short term debt = 50, what is the shareholders equity?O 30 O 50 O 80 O 120

Answer 1

Answer:

The shareholders equity is 120

Explanation:

Basing on accounting equation:

Total asset = Liabilities + Shareholders equity

Therefore:

Shareholders equity = Total asset - Liabilities = Total asset - (Short term debt + Long term debt)

The company has total assets of 200, long term debt of 30 and short term debt of 50.

Shareholders equity = 200 - (50 + 30) = 200 - 80 = 120