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)$200,000
B)$80,000
C)$90,000
D)$100,000

Question

Quizplus · Accepted Answer

The shareholders are entitled to the remaining assets after all liabilities have been paid off. In this case, the liabilities are $120,000. Therefore, the remaining assets available to be distributed to the shareholders are $200,000 - $120,000 = $80,000.

At the Time of Liquidation,Fairchild Company Reported Assets of $200,000,liabilities