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A business has the following items: - Land $1,500,000 - Machinery $30,000 - Cash $10,000 - Loan $500,000 - Owner’s equity? ____________

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5 votes

Answer:

The owner's equity amounts to $1,040,000

Step-by-step explanation:

The formula to compute the owner's equity is as:

Owner's equity = Assets - Liabilities

Where

Assets = Land + Machinery + Cash

= $1,500,000 + $30,000 + $10,000

= $1,500,000 + $40,000

= $1,540,000

Liabilities = Loan

= $500,000

Putting the values above in the formula:

= $1,540,000 - $500,000

= $1,040,000

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