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29 November, 18:54

Cavalier Copper shows on its most recent balance sheet $840 million in total liabilities, $10 billion in treasury stock (recorded at par of $1/share) and $520 million in common stock outstanding (also recorded at par of $1/share). The company had negative retained earnings of $40 million at the beginning of its fiscal year, and it made a net profit of $60 million during the year. The company's stock sells for $4/share on the date of the balance sheet. The company's total assets are.

a. $1.38 billion

b. $10.84 billion

c. $1.46 billion

d. $2.94 billion

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  1. 29 November, 19:09
    0
    a. $1.38 billion

    Explanation:

    total assets = total liabilities

    total Liabilities = liabilities + shareholders fund

    shareholders fund=common stock + retained earning as on the balance sheet date

    retained earnings as on bs date = profit at the year-end - loss at the beginning of the year

    =60-40 = 20 million

    shareholders fund = 520+20

    =540

    total liabilities=840+540=1380million i. e 1.38 billion

    therefore total asset=1.38 billion

    Therefore option A is correct
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