A company is obligated to pay its creditors $6,865 at the end of the year. If th

Question

A company is obligated to pay its creditors $6,865 at the end of the year. If the value of the company's assets equals $7,161 at that time, what is the value of shareholders' equity?

$0

$296

$148

$296

$14,026

(Not sure if the tax rates have anything to do with this problem or my next problem so I'm inserting it just incase. If it is needed then it goes with this problem)

The tax rates are as shown below:

Taxable Income Tax Rate $0 – 50,000 15 % 50,001 – 75,000 25 % 75,001 – 100,000 34 % 100,001 – 335,000 39 %

Explanation / Answer

Correct option is > $296

Shareholders' equity = Assets - Creditors

= 7161-6865

= $296

You are correct that we doktn require tax slabs for this question

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