Answer:
Liabilities = 96,000
Step-by-step explanation:
Use the fundamental accounting equation
Assets = Liabilities + Equity
Substitute the information you are given
183,000 = Liabilities + 887,000
Isolate "Liabilities". Subtract 887,000 on both sides.
183,000 - 887,000 = Liabilities + 887,000 - 887,000
-704000 = Liabilities
This problem is impossible if the equity is 887,000 with 183,000 being the assets. The liabilities will be a negative number.
If the equity = 87,000, following the same steps:
Assets = Liabilities + Equity
183,000 = Liabilities + 87,000
183,000 - 87,000 = Liabilities + 87,000 - 87,000
96,000 = Liabilities
Liabilities = 96,000
Therefore, the total liabilities amount to $96,000.
