Homework SourseE131B commute the missing amount in the accounting equation
E1-31B:
commute the missing amount in the accounting equation for each company (Amount in billions):
Which company appears to have the strongest financial position? Explain your reasoning.
| Assets | Liabilities | Stockholders Equity | ||
| Corner Grocery | $? | $51 | $37 | |
| Sixth Street Bank | 21 | ? | 20 | |
| Valerie\'s Gifts | 29 | 13 | ? |
Solution
Corner Grocery:
Assets = Liabilities + Stockholders Equity
Assets = $51 + $37 = $88
Sixth Street Bank:
Liabilities = Assets - Stockholders Equity
Liabilities = $21 - $20 = $1
Valerie\'s Gifts:
Stockholders Equity = Assets - Liabilities
Stockholders Equity = $29 - $13
Stockholders Equity = $16
Sixth Street Bank appears to have the strongest financial position because its liabilities make the the smallest percentage of company assets. This percentage is 4.76%.
