Classifying Shareholders' Equity in a Balance Sheet

Hard Financial Statements Balance Sheet

XYZ Manufacturing Company aims to understand its financial health by reviewing its Balance Sheet. As of December 31, 2023, the company's total assets amount to $750,000, while total liabilities are $450,000. The remaining portion represents shareholders' equity.

Based on this information, how should XYZ Manufacturing Company classify its shareholders' equity in the Balance Sheet?

Shareholders' equity is the residual interest after deducting total liabilities from total assets.

Shareholders' equity must be equal to total liabilities.

Shareholders' equity is the sum of total assets and total liabilities.

Hint

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