Answer:
a. Total liabilities = $280,000
b. Total liabilities = $250,000
Total equity -= $250,000
Explanation:
As we know that
Total assets = Total liabilities + shareholder equity
So in the first case
The amount of the liabilities is
Total liabilities = Total assets - Total equity
= $700,000 - $420,000
= $280,000
And, in the second case, the total assets is $500,000
And, the liabilities and equity amounts are equal to each other
So in this case, the liabilities is $250,000 and the equity is $250,000
The liabilities can be estimated by the equation in which assets is equal to the amount of liabilities and capital.
i.e. Assets = Capital + Liabilities
(a) In order to find the liabilities of Charter company if the assets and equity are given , we will have to put the amounts in this equation.
Given
Assets are given as $700,000
Equity is given as $420,000
[tex]\begin{aligned}\rm Assets&= Capital+Liabilities\\\rm \$700,000 &= \$420,000+ Liabilities\\\rm Liabilities&= \$700,000- \$420,000\\\rm Liabil;ities &= \$280,000 \end[/tex]
(b) We know that assets amount is equal to the combined amount of equity and liability.
Given further, equity and liability amounts are equal in case of Martin Marine.
Therefore, half of assets will be liability and the other half will be equity. So, $500,000 is divided into two equal parts and equity $250,000 and Liability $250,000 is obtained.
Learn more about Assets here:
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