A firm has $200,000 in total assets and $120,000 in owner's equity. What are the total liabilities?
A. $80,000
B. $200,000
C. $320,000
D. Cannot be determined from the information given
A
Assets = Liabilities + Shareholders' Equity
Liabilities=assests-equity
you are correct.
To determine the total liabilities of the firm, we can use the equation:
Total Assets = Total Liabilities + Owner's Equity
We are given that the firm has $200,000 in total assets and $120,000 in owner's equity. Plugging these values into the equation, we have:
$200,000 = Total Liabilities + $120,000
Rearranging the equation, we can isolate the variable for total liabilities:
Total Liabilities = $200,000 - $120,000
Calculating this, we find that:
Total Liabilities = $80,000
Therefore, the correct answer is option A: $80,000.