Question

You are examining the year-end balance sheet for your business.

According to the information in the Balance Sheet, what is your equity in the business?
Balance Sheet for year ending December 31
Assets
Cash: $10,000
Inventory: $2,000
Equipment: $5,000
Total Assets: $17,000
Liabilities
Credit card balance: $2,500
Long-term debt: $0
Unearned revenues: $3,500
Total Liabilities: $6,000

Answer 1

The equity in the business, calculated by subtracting total liabilities ($6,000) from total assets ($17,000), is $11,000.

Step-by-step explanation:

To determine the equity in your business according to the year-end balance sheet, you subtract the total liabilities from the total assets. In your case, the balance sheet shows total assets of $17,000 and total liabilities of $6,000.

Using the formula:

Equity = Total Assets - Total Liabilities

We calculate your equity as follows:

Equity = $17,000 - $6,000

Equity = $11,000

Therefore, the equity you have in your business is $11,000.

Answer 2

The equity in the business is calculated by subtracting the total liabilities from the total assets, which in this case, is $17,000 - $6,000, resulting in an equity of $11,000.

Step-by-step explanation:

To calculate the equity in a business using the information from its balance sheet, you subtract the total liabilities from the total assets. In this case, the business has total assets of $17,000 and total liabilities of $6,000. Therefore, the equity of the business can be calculated as follows:

Equity = Total Assets - Total Liabilities
Equity = $17,000 - $6,000
Equity = $11,000

Thus, the equity in the business is $11,000.