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Accounting Equation

I am not sure if I am using the right formula and have the right answer for these study questions. Can you please show me the formula for thee type of problems .

1. If current assets equal $25,000, liabilities equal $40,000, and owners equity equals $55,000, the noncurrent assets equal _____?.

2. If the current ratio is 2.2:1, current assets are 33,000, and noncurrent assets equal $55,000, then owners' equity is _____ .(Assume that all liabilities are current).

3. What is the current ratio if noncurrent assets equal $60,000, total assets equal $95,000, and owners' equity equals $70,000?

Solution Preview

1. If current assets equal $25,000, liabilities equal $40,000, and owers' equity equals $55,000, the noncurrent assets equal _____?.

We use the accounting equation - Total Assets = Liabilities + Equity
we are given that liabilities = 40,000 and equity = 55,000. The total assets will be 40,000+55,000=95,000.
Total Assets = ...

Solution Summary

The solution explains the use of the accounting equation to calculate the missing values.

$2.19