Question

Amanda is the owner of a flooring company. Her assets include $15,000 in cash, $10,000 in inventory, and $5,000 in equipment. Her liabilities include a $6,000 credit card balance and $800 in long-term debt. What is Amanda's equity?

Answer 1

Amanda's equity in her flooring company is calculated by subtracting her total liabilities from her total assets, amounting to $23,200.

Step-by-step explanation:

Understanding Equity

To calculate Amanda's equity in her flooring company, we need to subtract her total liabilities from her total assets. The assets include $15,000 in cash, $10,000 in inventory, and $5,000 in equipment, which sum up to $30,000. Amanda's liabilities total $6,800, including a $6,000 credit card balance and $800 in long-term debt. Therefore, Amanda's equity would be the assets minus liabilities, i.e., $30,000 - $6,800 = $23,200.

Answer 2

Amanda's equity in her flooring company is the total assets ($30,000) minus the total liabilities ($6,800), which equals $23,200.

Step-by-step explanation:

To calculate Amanda's equity in her flooring company, we need to subtract her total liabilities from her total assets. Her assets include $15,000 in cash, $10,000 in inventory, and $5,000 in equipment. Amanda's liabilities are a $6,000 credit card balance and $800 in long-term debt. To find the equity, we perform the following calculation:

Equity = Total Assets - Total Liabilities

Equity = ($15,000 + $10,000 + $5,000) - ($6,000 + $800)

Equity = $30,000 - $6,800

Equity = $23,200

Therefore, Amanda's equity in her flooring company is $23,200.