Total Assets, Liabilities, and Shareholders' Equity Are $5,000, $1,500, and $3,500

question 85

Essay

Total assets, liabilities, and shareholders' equity are $5,000, $1,500, and $3,500 before common stock is issued for $500 cash. What are the new amounts of assets, liabilities, and shareholders' equity after this event?

---

Definitions:

Black And White

A term often used to describe a situation or view that is clear-cut, with no gray area or ambiguity.

Caption

A caption is a brief explanation or description accompanying an illustration, photo, or diagram, often providing context or additional information.

Sustainable Competitive Advantage

A long-term strategy that a company possesses, which enables it to remain more competitive than its rivals, leading to greater sales or margins and retaining loyal customers.

Strategic Focus

The act of concentrating a company's efforts and resources on a particular business strategy or goal to achieve competitive advantage.