At the time of liquidation, Fairchild Company reported assets of $200,000, liabilities of $120,000, common stock of $90,000 and retained earnings of ($10,000). What amount of Fairchild's assets are the shareholders entitled to receive? a) $200,000b) $80,000c) $90,000d) $100,000

Question

Mathematics

Quinn Black

21 October, 01:15

At the time of liquidation, Fairchild Company reported assets of $200,000, liabilities of $120,000, common stock of $90,000 and retained earnings of ($10,000). What amount of Fairchild's assets are the shareholders entitled to receive? a) $200,000b) $80,000c) $90,000d) $100,000

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Lilia Barber · Answer 1

c) $90.000

Step-by-step explanation:

common stock is easy to sell, but is not real money at the time of liquidation.

Assets are count as money, but is necessary to pay de debts, (liabilities).

At the time of liquidation, $200.000 (assets) - $120.000 (liabilities) = $80.000

+ Retained earnings ($10.000) = $90.000.