Asked by Yokasta C. Estrella Lucas on Jun 03, 2024
Verified
Cumberland Fabrication has $80 million in assets and $50 million in owners' equity.How much does the firm have in liabilities?
A) $80 million
B) $50 million
C) $30 million
D) $20 million
Owners' Equity
The residual interest in the assets of an entity after deducting liabilities, essentially the net worth belonging to the owners.
Assets
Resources with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.
Liabilities
Financial obligations or debts that a company owes to others, which need to be paid back in the future.
- Understand the basic principles of assets, liabilities, and equity.
Verified Answer
JF
Jacob FowlerJun 04, 2024
Final Answer :
C
Explanation :
The firm has $30 million in liabilities, calculated by subtracting the owners' equity ($50 million) from the total assets ($80 million).
Learning Objectives
- Understand the basic principles of assets, liabilities, and equity.