Question

Quick Silver is famous for custom skateboards. At the end of a recent​ year, Quick Silver's total assets added up to $ 690 comma 000  and​ stockholders' equity was $ 254 comma 000. How much did Quick Silver owe​ creditors?

Answer 1

Answer)

Calculation of Amount owed by “Quick Silver” to its Creditors

Stockholders’ Equity + Outside liabilities = Total Assets

But in the question, it is given the only creditors are part of outside liabilities. Thus the above formula becomes:

Stockholders’ Equity + Creditors = Total Assets

$ 254,000 + Creditors = $ 690,000

Creditors = $ 690,000 - $ 254,000

                  = $ 436,000       

Therefore the amount owed by the company to its creditors is $ 436,000.