Question

The liability of Louie Madilim Company is equal to one-third of the total assets, and the owner’s equity is 240,000. What is the amount of the liability?

Answer 1

The amount of the liability will be Rs. 1,20,000.

According to the ques,

Liability = 1/3 of Total assets

and, we know that

Assets= Liability + Owner's Equity (Capital)

Assets= 1/3 Assets + 2,40,000

Assets= 2,40,000 × 3/ 2 =3,60,000

The amount of Assets is Rs. 3,60,000.

Therefore, Liability= 1/3 × 3,60,000 =1,20,000