Question

On May 31 of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $25,500; Accounts Receivable, $7,800; Supplies, $1,150; Equipment, $12,600; Accounts Payable, $9,850. What is the amount of owner's equity as of May 31 of the current year?A) $47,050B) $37,200C) $13,150D) $25,500E) $9,350

Answer 1

B

Step-by-step explanation:

Financial Statements depicts the financial position of a firm at a particular point of time or specified date. The users of financial statements use various types of analysis to understand or compare the current financial statements of the company to prior years or with those of the competitors.

Given:

Cash = $25,500

Accounts receivable = $7,800

Supplies = $1,150

Equipment = $12,800

Accounts payable = $9,850

As per the accounting equation:

Assets = Liabilities + Owner's Equity

Cash + Accounts receivable + Supplies + Equipment = Accounts payable + Owner's equity

$25,500 + $7,800 + $1,150 + $12,600 = Accounts payable + $9,850

$47,050 = Accounts payable + $9,850

Accounts payable = $47,050 - $9,850

Accounts payable = $37,200