Question

A company balance sheet has total assets of $400,000. If liabilities are $150,000, what is the owner's equity?

a) $250,000
b) $400,000
c) $550,000
d) $150,000

Answer 1

The owner's equity in the company is $250,000.

Step-by-step explanation:

In a company balance sheet, owner's equity is calculated by subtracting the total liabilities from the total assets.

In this case, the total assets are given as $400,000 and the liabilities are $150,000. To find the owner's equity, we subtract the liabilities from the total assets: $400,000 - $150,000 = $250,000.

Therefore, the owner's equity is $250,000, which corresponds to option a).