The total liabilities of Hogan's Company on the balance sheet are $270,000; this amount is equal to three-fourths of the total assets. What is the amount of equity?
A) $202,500.
B) $ 90,000.
C) $360,000.
D) $630,000.

Question

Quizplus · Accepted Answer

If liabilities are $270,000 and they are three-fourths of the total assets, then total assets are $270,000 / (3/4) = $360,000. Equity is calculated as total assets minus total liabilities, so equity is $360,000 - $270,000 = $90,000.

The Total Liabilities of Hogan's Company on the Balance Sheet