On December 31, 2018, Total Assets and Liabilities Are Measured

question 92

Essay

On December 31, 2018, total assets and liabilities are measured at $24,000 and $16,000, respectively. The total market value of the company's common stock is $9,000. At what amount would shareholders' equity be measured on the December 31, 2018 balance sheet?

---

Definitions:

Direct Labor Cost

The wages and other compensation paid to employees who are directly involved in the production of goods or services.

Variable Costing

An accounting method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs, excluding fixed overhead.

Direct Labor Cost

The total cost of labor directly involved in the production of goods, including wages and benefits.

Break-Even Point

The level of sales at which profit is zero.