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8 October, 13:34

The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $39,000; Liabilities = ?; Common Stock = $6,900; Revenue = $14,800; Dividends = $1,700; Beginning Retained Earnings = $4,700; Ending Retained Earnings = $8,900.

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  1. 8 October, 13:41
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    Total liabilities is $23,200

    Explanation:

    In this question, we apply the accounting equation which is shown below:

    Total assets = Total liabilities + shareholder's equity

    $39,000 = Total liabilities + $6,900 + $8,900

    $39,000 = Total liabilities + $15,800

    So, the total liabilities equal to

    = $39,000 - $15,800

    = $23,200

    The shareholder's equity includes Common Stock and the ending retained earning balance and the same we take in the computation part.
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