Using the balance sheet, calculate XYZ Company's assets.
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|XYZ Company - Balance Sheet| |
|Assets|Liabilities|
|Cash|$43,000|Notes|$45,000|
|Inventory|$46,000|Wages|$32,000|
|Property|$103,000| ||
| ||Owner's Equity|
| |Stock|$67,000|
| |Investment|$48,000|
[tex] \text { Assets }=$[?][/tex]
Answer (2)
Identify the assets: Cash, Inventory, and Property.
Sum the values of the assets: $43,000 + $46,000 + $103,000.
Calculate the total assets: $192,000.
The total assets of XYZ Company are $\boxed{ 192,000} .
Explanation
Understanding the Problem We are given the balance sheet of XYZ Company and need to calculate the total assets. The assets listed are Cash, Inventory, and Property. We will sum these values to find the total assets.
Identifying Assets The assets are: Cash = $43,000 Inventory = $46,000 Property = $103,000
Calculating Total Assets To find the total assets, we add the values of each asset: Total Assets = Cash + Inventory + Property Total Assets = $43,000 + $46,000 + $103,000
Final Calculation Total Assets = $192,000
Examples
Understanding how to calculate total assets from a balance sheet is crucial in business. For example, if you're analyzing a company's financial health before investing, knowing the total assets helps you assess its ability to cover liabilities and indicates its overall financial strength. This calculation is also essential when applying for loans, as lenders use it to evaluate your company's solvency and creditworthiness. Imagine you are running a small store; knowing your total assets (cash, inventory, property) helps you make informed decisions about expanding your business or managing your finances effectively.
The total assets of XYZ Company are calculated by summing Cash ($43,000), Inventory ($46,000), and Property ($103,000), resulting in total assets of $192,000. This calculation helps assess the company's financial strength. Understanding total assets is essential for effective financial management.
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