64. Jaunty Coffee Co.’s balance sheet shows $750 million in its asset account and $250 million in its liabilities account. Jaunty Coffee Co. reports short-term assets of $200 million. What is Jaunty Coffee’s balance in long-term assets?
Answer: D
Jaunty Coffee's balance in long-term assets is $550 million.
To determine Jaunty Coffee's long-term assets, we subtract the short-term assets from the total assets. With total assets of $750 million and short-term assets of $200 million, the calculation yields long-term assets of $550 million.
A) $200 million
This option represents the amount of Jaunty Coffee's short-term assets, not the long-term assets. Since the question specifically asks for long-term assets, this option is incorrect.
B) $250 million
This choice does not accurately reflect the calculation of long-term assets. It may incorrectly suggest a portion of liabilities or an unrelated figure, making it an unsuitable answer for the question posed.
C) $450 million
While this figure is close, it is not the correct balance of long-term assets. The calculation is based on the total assets minus the short-term assets, leading to a different total that is higher than this option.
D) $550 million
This is the correct answer as it correctly reflects the balance of long-term assets. By subtracting the $200 million in short-term assets from the total assets of $750 million, the remaining balance of $550 million represents the long-term assets.
Conclusion
The correct answer, $550 million, is derived from the straightforward calculation of total assets minus short-term assets. Options A, B, and C do not accurately represent the remaining assets after accounting for short-term holdings, thereby confirming that D is the only viable option.