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18 February, 08:44

KCCO, Inc., has current assets of $6,000, net fixed assets of $25,100, current liabilities of $4,950, and long-term debt of $12,000.

What is the value of the shareholders' equity account for this firm? (Do not round intermediate calculations.)

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  1. 18 February, 12:24
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    The value of the company's shareholder's equity account is $14,150

    Explanation

    We know that:

    Current Assets = $6,000

    Net Fixed Assets = $25,100

    ⇒ Total Assets = Current Assets + Non-current assets

    Net Fixed Assets is a non-current asset

    ⇒ Total Assets = Current Assets + Net Fixed Assets

    ⇒ Total Assets = 6,000 + 25,100

    ⇒ Total Assets = $31,100

    Current Liabilities = $4,950

    Long-term debt = $12,000

    ⇒ Total Liabilities = Current Liabilities + Non-current Liabilities

    Long-term debt is a non-current liability

    ⇒ Total Liabilities = Current Liabilities + Long-term debt

    ⇒ Total Liabilities = 4,950 + 12,000

    ⇒ Total Liabilities = $16,950

    Now, Shareholder's Equity = Total Assets - Total Liabilities

    ⇒ Shareholder's Equity = 31,100 - 16,950

    ⇒ Shareholder's Equity = $14,150
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