Question

The total assets of Crane Company are $712,000 and its liabilities are equal to one-half of its total assets. What is the amount of Crane Company's owner's equity?

Answer 1

To determine the owner's equity, we calculate the liabilities and subtract them from the total assets.

Step-by-step explanation:

To determine the owner's equity of Crane Company, we need to calculate the amount of liabilities first. The question states that the liabilities are equal to one-half of the total assets. Therefore, liabilities = $712,000 / 2 = $356,000. Next, we can calculate the owner's equity by subtracting the liabilities from the total assets. Owner's equity = Total assets - Liabilities = $712,000 - $356,000 = $356,000. Hence, the amount of Crane Company's owner's equity is $356,000.