The assets of dallas & associates consist entirely of current assets and net plant and equipment. the firm has total assets of $2.6 million and net plant and equipment equals $2.2 million. it has notes payable of $150,000, long-term debt of $755,000, and total common equity of $1.55 million. the firm does have accounts payable and accruals on its balance sheet. the firm only finances with debt and common equity, so it has no preferred stock on its balance sheet. write out your answers completely. for example, 25 million should be entered as 25,000,000. enter negative amounts, if any, with a minus sign. what is the company's total debt?

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Business

Alicia

12 May, 14:44

The assets of dallas & associates consist entirely of current assets and net plant and equipment. the firm has total assets of $2.6 million and net plant and equipment equals $2.2 million. it has notes payable of $150,000, long-term debt of $755,000, and total common equity of $1.55 million. the firm does have accounts payable and accruals on its balance sheet. the firm only finances with debt and common equity, so it has no preferred stock on its balance sheet. write out your answers completely. for example, 25 million should be entered as 25,000,000. enter negative amounts, if any, with a minus sign. what is the company's total debt?

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Jenny Landry · Answer 1

Answer: The company's total debt is $1,050,000

Explanation: The balance sheet has two sides, assets and (equity + liabilities). Both the sides are always equal. Since we have total assets given as $2,600,000 so the liabilities + equity should also be equal to $2,600,000.

The Total assets = $2,600,000

Total common Equity = $1,550,000

Total Liabilities = ?

Total Liabilities = Total Assets - Total Common Equity,

By input the variables in the above formula,

Total Liabilities = $2,600,000 - $1,550,000

Total Liabilities = $1,050,000.

Therefore, the total debt of Dallas and Associates is $1,050,000