Krammer Company Has Liabilities Equal to One-Fourth of the Total

question 203

Essay

Krammer Company has liabilities equal to one-fourth of the total assets. Krammer's owner's equity is $45,000. Using the accounting equation, what is the amount of liabilities for Krammer?

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Definitions:

Production Quantity

The total volume or number of units of a product made by a company or industry.

Contribution Margin

Contribution margin is a cost accounting concept that calculates the difference between a product's price and its variable costs, indicating how much each unit sold contributes to covering fixed costs and generating profit.

Variable Cost

Costs that fluctuate in relation to the level of output or production, such as raw materials and direct labor expenses.

Operating Cash Flow

Describes the cash generated by the regular operating activities of a business in a specific period.