A firm has common stock of $100, paid-in surplus of $370, total liabilities of $460, current assets of $490, and net fixed assets of $700. What is the amount of the shareholders' equity?
Shareholders' equity is composed of the common stock and paid-in surplus, and it does not include liabilities. To calculate the total shareholders' equity, we add the common stock and paid-in surplus, and then subtract total liabilities.
Shareholders' Equity = Common Stock + Paid-In Surplus - Total Liabilities
Let's do the calculation:
Shareholders' Equity = $100 (Common Stock) + $370 (Paid-In Surplus) - $460 (Total Liabilities)
Shareholders' Equity = $100 + $370 - $460 Shareholders' Equity = $410
So, the amount of the shareholders' equity for the firm is $410.
