The equity of Autumn Company is $130,000 and the total liabilities are $40,000. The total assets are ________.

Question

BlackTom AI · Accepted Answer

Assets = Liabilities + Equity, so use the basic accounting equation to find total assets.

1. Relevant knowledge points and concepts
- The fundamental accounting equation: Assets = Liabilities + Equity.  
- Equity (owner’s claim) plus creditors’ claims (liabilities) equals total resources (assets).  
- All amounts given are in dollars and are additive in this context.

2. Complete reasoning process (step by step)
- Given: Equity = $130,000 and Liabilities = $40,000.  
- Apply the accounting equation directly: Assets = Liabilities + Equity.

3. Calculations with intermediate steps
- Assets = $40,000 + $130,000  
- First add the thousands: 40 + 130 = 170  
- Therefore Assets = $170,000

4. Why the correct answer is correct
- The sum $170,000 exactly satisfies the accounting equation. With $40,000 owed to creditors and $130,000 claimed by owners, the company must control $170,000 of assets that back those claims. This is the only value consistent with the definitions of liabilities, equity, and assets.

5. Why the other options are incorrect
- a. $260,000 is too large; it would imply liabilities + equity = $260,000, which conflicts with the given amounts. That would require either liabilities or equity to be larger than stated.  
- b. $80,000 is too small and even less than the stated equity; since liabilities are positive ($40,000), assets cannot be less than equity in this scenario.  
- c. $90,000 is also too small and does not equal the sum of $40,000 and $130,000.

6. Conclusion confirming the answer
- Assets = $40,000 + $130,000 = $170,000, so the correct choice is d. $170,000, which matches the provided answer.

The equity of Autumn Company is $130,000 and the total liabilities are $40,000. The total assets are ________.单项选择题

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