accounting questions?
accounting questions?
The liabilities of Cochran Company equal one-fifth of the total assets. The owner?s equity is $ 40,000. What is the amount of the liabilities?
Answers:
Space493: The answer is $10,000
Assets = Liabilities + Owners Equity
X = .2X + $40,000
.8X = $40,000
X= $50,000
.2X = $10,000
2007-10-16 15:22:53
2007-10-16 15:22:53
Chosen Answer
TaxGurl: Assets = liabilities + owner's equity 5A = A + $40,000 4A = 40,000 A = $10,000 Assets = $50,000 Liabilities = $10,000 OE = $40,000
2007-10-16 15:24:00
TaxGurl: Assets = liabilities + owner's equity 5A = A + $40,000 4A = 40,000 A = $10,000 Assets = $50,000 Liabilities = $10,000 OE = $40,000
2007-10-16 15:24:00
Rawshon Z: The basic law of accounting is A=L+OE and according to the problem only the value of OE is known. and as a hint we know that the value of liabilities is 1/5th of the value of total assets. So, if we put down the whole scenario in a formula like A=1/5A+OE the result or outcome will be:
A=1/5A+40000
0r, A=A+200000/5
or, 5A-A=200000
or, 4A=200000
or, A=50000
So, the value of the Liabilities will be
A=L+OE
or, 50000=L+40000
or, L=50000-40000
=10000
2007-10-16 15:44:35
2007-10-16 15:44:35