Thank you for visiting If a business has assets of 200 000 and equity of 125 000 then liabilities must equal Assets Equity Liabilities Liabilities 200 000 125 000. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
Final Answer:
If a business has assets of $200,000 and equity of $125,000, then liabilities must equal $75,000.
Explanation:
The accounting equation is Assets = Liabilities + Equity. In this scenario, assets are given as $200,000, and equity is $125,000. To find liabilities, rearrange the equation as Liabilities = Assets - Equity. Substituting the given values, Liabilities = $200,000 - $125,000, resulting in $75,000. This calculation represents the portion of the business's financing provided by external sources (liabilities), with equity representing the owner's stake. Therefore, in this specific case, liabilities would amount to $75,000 to maintain the balance in the accounting equation.
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