Question

The following items are components of a traditional balance sheet. How much is the total equity of the firm?

Plant and equipment $44,600
Common stock 15,000
Cash 7,300
Inventory 22,400
Bad debt reserve 6,000
Paid in excess 6,000
Accumulated depreciation 27,600
Accounts receivable 22,000

Answer 1

$50,600

Step-by-step explanation:

The computation of the total equity is shown below:

= Common stock + paid in excess

= $44,600 + $6,000

= $50,600

We simply added the common stock and the paid in excess as these two are come under the total equity

And, the rest items would be considered as a current assets and the fixed assets so the same is not considered in the computation part