A firm has $260,000 in assets and $158,000 in stockholders' equity. It owes $55,000 from a long-term loan, and this is its only long-term liability. This firm has ____ in total current liabilities.
A) $55,000
B) $103,000
C) $47,000
D) $102,000
E) $213,000

Question

Quizplus · Accepted Answer

Total liabilities can be calculated by subtracting stockholders' equity from total assets:

Total liabilities = Total assets – Stockholders' equity
Total liabilities = $260,000 - $158,000
Total liabilities = $102,000

Since the only given long-term liability is $55,000, the remaining liabilities must be current liabilities:

Current liabilities = Total liabilities - Long-term liability
Current liabilities = $102,000 - $55,000
Current liabilities = $47,000

Therefore, the answer is C) $47,000.

A Firm Has $260,000 in Assets and $158,000 in Stockholders