# Sunset Roofing Inc. has total owners' equity of $37,948. The firm has current assets of$19,422,...

## Question:

Sunset Roofing Inc. has total owners' equity of $37,948. The firm has current assets of$19,422, current liabilities of $13,021 and total assets of$86,428.

What is the value of the long-term debt?

## Long-term Debt:

The long-term debt represents the amount that a company owes to its creditors and is required to repay the same after a period of one year which may extend to many years as agreed upon. The long-term debt comprises of bank borrowings, long-term notes payable, debt instruments like bonds, debentures, etc.

The value of Sunset Roofing Inc's long-term debt is $35,459. Explanation: Sunset Roofing Inc. has shared the following information: • Total assets =$86,428
• Current liabilities = $13,021 • Total owner's equity =$37,948

Computation:

As per the balance sheet equation:

• Owners' equity = Total assets - Total liabilities
• Total liabilities = $86,428 -$37,948
• Total liabilities = $48,480 And, as we know that total liabilities is the sum of long-term debt and the current liabilities, hence: • Total liabilities = Current liabilities + Long-term debt • Long-term debt = Total liabilities - Current liabilities • Long-term debt =$48,480 - $13,021 • Long-term debt =$35,459 