At the end of an accounting period, a company's total assets equaled [tex]\$515,000[/tex] and owner's equity equaled [tex]\$210,000[/tex]. How much were the company's liabilities?

[tex]\text{Liabilities} = \$ \, ?[/tex]

Round to the nearest hundredth.



Answer :

To determine the company's liabilities at the end of the accounting period, we can use the fundamental accounting equation:

[tex]\[ \text{Assets} = \text{Liabilities} + \text{Owner's Equity} \][/tex]

Given:
- Total Assets ([tex]\( \text{Assets} \)[/tex]) = \[tex]$515,000 - Owner's Equity (\( \text{Owner's Equity} \)) = \$[/tex]210,000

We need to find the value of the company's Liabilities ([tex]\( \text{Liabilities} \)[/tex]). Rearranging the accounting equation to solve for Liabilities gives:

[tex]\[ \text{Liabilities} = \text{Assets} - \text{Owner's Equity} \][/tex]

Substituting the given values into the equation:

[tex]\[ \text{Liabilities} = \$515,000 - \$210,000 \][/tex]

Now, perform the subtraction:

[tex]\[ \text{Liabilities} = \$305,000 \][/tex]

Therefore, the company's liabilities at the end of the accounting period are:

[tex]\[ \boxed{\$305,000} \][/tex]