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On January 31, a company's balance sheet showed net assets of $2,600 and liabilities of $700. Stockholders' equity on January 31 was:Multiple Choice$3,300.$700.$2,600.$1,900.Incorrect

Question

On January 31, a company's balance sheet showed net assets of 2,600andliabilitiesof2,600 and liabilities of 700. Stockholders' equity on January 31 was:Multiple Choice3,300.3,300.700.2,600.2,600.1,900.Incorrect

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Solution

The Stockholders' equity can be calculated using the following formula:

Stockholders' Equity = Total Assets - Total Liabilities

Given in the problem, we have:

Total Assets (Net Assets) = 2,600TotalLiabilities=2,600 Total Liabilities = 700

Substitute these values into the formula:

Stockholders' Equity = 2,6002,600 - 700 = $1,900

So, the Stockholders' equity on January 31 was $1,900.

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