Question

On November 1 of the current year, the assets and liabilities of Big Jim Inc., are as follows: Cash, $14,000; Accounts Receivable, $4,200; Supplies, $4,050; Land, $15,000; Accounts Payable, $6,530. What is the amount of stockholder's equity as of November 1 of the current year?

Answer 1

Stockholder's equity for Big Jim Inc. is calculated using the basic accounting equation. After totaling the assets and subtracting the liabilities, the stockholder's equity is determined to be $30,720 as of November 1 of the current year.

Step-by-step explanation:

To determine the amount of stockholder's equity for Big Jim Inc. as of November 1 of the current year, we need to use the basic accounting equation, which is Assets = Liabilities + Stockholder's Equity. First, we total the assets, which are given as Cash ($14,000), Accounts Receivable ($4,200), Supplies ($4,050), and Land ($15,000), amounting to $37,250. Next, we take the total liabilities, which are Accounts Payable ($6,530). Finally, to find stockholder's equity, we subtract the total liabilities from the total assets, which gives us $37,250 - $6,530 = $30,720. Therefore, the amount of stockholder's equity as of November 1 is $30,720.

The stockholder's equity can be calculated by subtracting the total liabilities from the total assets. In this case, the total assets are $14,000 (cash) + $4,200 (accounts receivable) + $4,050 (supplies) + $15,000 (land) = $37,250. The total liabilities are $6,530 (accounts payable). So the stockholder's equity is $37,250 - $6,530 = $30,720.