Question

Zana Lovley has a small craft

shop with these assets for the
month of February: cash,
$400.25; craft inventory,
$612.84; craft-making equip-
ment, $58.72; office furniture, $468.22. She owed the
bank $807.58 and Creative Craft Company $112.89.
What was Zana Lovley's capital

Answer 1

$619.56

Explanation:

Think ALOE: Assets = Liabilities + Owner's Equity (capital)

Assets- anything of value you own (+)

Add 400.25, 612.84, 58.72, 468.22

400.25 + 612.84 + 58.72 + 468.22

= 1540.03 (this is Zana's total assets and owner's equity - both sides of the aloe equation have to stay equal)

Owing someone is a liability, therefore subtract 807.58 and 112.89 from your assets and owner's equity

1540.03 - 807.58 = 732.45

732.45 - 112.89 = $619.56

Zana's capital is $619.56

Have a lovely rest of your day! :)