The balance sheet of Old Gold Mines, a gold mining company, for the year ended June 30, 20x1, showed current assets of $6 million, noncurrent assets of $49 million, noncurrent liabilities of $14 million, and current liabilities of $4 million. Compute the amount of shareholders' equity on Old Gold Mines' balance sheet at the end of 20x1.
A)$14 million
B)$27 million
C)$33 million
D)$37 million
E)$41 million

Question

Quizplus · Accepted Answer

Shareholders' equity can be calculated using the accounting equation: Assets = Liabilities + Shareholders' Equity. Here, Assets = Current Assets ($6 million) + Noncurrent Assets ($49 million) = $55 million. Liabilities = Current Liabilities ($4 million) + Noncurrent Liabilities ($14 million) = $18 million. Therefore, Shareholders' Equity = Assets - Liabilities = $55 million - $18 million = $37 million.

The Balance Sheet of Old Gold Mines, a Gold Mining