In my balance sheet, I have inventories of $18000, total assets of $70400, long-term debt of $22000. What is the amount of my total liabilities and equity?

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BlackTom AI · Accepted Answer

We start by identifying the basic accounting equation: Assets = Liabilities + Equity. The problem gives total assets of $70,400, inventories of $18,000 (which are part of assets), and long-term debt (a liability) of $22,000.

Option 1: $4,000. This is far too low to satisfy the equation once we account for the stated assets and long-term debt; it would require liabilities and equity to sum to $4,000, which contradicts the provided asset total of $70,400.

Option 2: $70,400. Since total assets are $70,400, the combined total of liabilities and equity must equal $70,400 as well to balance the sheet. No contradiction arises from the given long-term debt of $22,000, because liabilities plus equity can include other liabilities and equity amounts that sum to the asset total.

Option 3: $48,400. If liabilities and equity were $48,400, the balance sheet would imply assets of $48,400, which does not match the stated total assets of $70,400. This creates an inconsistency.

Option 4: $6,700. Similar to option 3, a total of $6,700 for liabilities and equity would not balance with assets of $70,400, unless there were missing asset values or misreported figures, which the problem does not indicate.

In summary, the only value that preserves the fundamental accounting equation with the given total assets is the total liabilities and equity equal to $70,400, aligning with the stated asset total.

VPAB13H3 F LEC01 Final Exam Quiz

In my balance sheet, I have inventories of $18000, total assets of $70400, long-term debt of $22000. What is the amount of my total liabilities and equity?

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