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26 April, 09:08

If Northland has a debt of $5 million in 2014, and runs a deficit of $0.3 million in 2015, and a surplus of $0.4 million in 2016, what would its debt be at the end of 2016, assuming no additional interest is added to its debt? $5.3 million $4.3 million $4.9 million $5.7 million

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  1. 26 April, 10:06
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    The correct answer is:

    $4.9 million

    Explanation:

    To find the debt balance at the end of 2016, we will first group the entries into debit or credit entries from 2014 to 2016, and this is done as follows:

    particulars debit entry (million dollars) credit (million dollars)

    debt in 2014 5 -

    deficit in 2015 0.3 -

    surplus in 2016 - 0.4

    Total 5.3 0.4

    Debt balance at the end of 2016 = 5.3 - 0.4 = $4.9 million
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