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A company is obligated to pay its creditors $6,145 at the end of the year. If...

A company is obligated to pay its creditors $6,145 at the end of the year. If the value of the company's assets equals $5,863 at that time, what is the value of shareholders' equity?

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Expert Solution

If total assets are $5,863, the owners' equity is:

Owners' equity = Max[($5,863 - $6,145), 0]

Owners' equity = $0

jeff jeffy answered 2 years ago
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