Final answer:
The total Owner's equity on a balance sheet with a total debit side of $2,000,000 and total liabilities of $500,000 is $1,500,000. This is computed by subtracting total liabilities from the total debit side.
Step-by-step explanation:
The student's question deals with understanding how to compute the total Owner's equity on a balance sheet when given the total debit side and total liabilities. In this case, a balance sheet with a total debit side of $2,000,000 and total liabilities of $500,000 implies that the Owner's equity is simply the difference between the two, which would be $2,000,000 - $500,000 = $1,500,000. Therefore, the total Owner's equity is $1,500,000.
To illustrate this with an example related to a bank's T-account balance sheet: If a bank has deposits (liabilities) of $400, reserves (assets) of $50, government bonds (assets) worth $70, and has made loans (assets) of $500, you would set up a T-account balance sheet whereby the total assets of the bank ($620) equal its liabilities ($400) plus its net worth. The net worth in this case, would be the total assets minus the total liabilities, so $620 - $400 = $220.