Question

The balance sheet for caleb's surf shop shows

current assets of $65,000,
fixed assets of $104,000, and
total liabilities of $157,000.
its current assets include accounts receivable totalling $41,000.
the store's current liabilities equal $67,000.
calculate owners' equity.
a. $2,000
b. $12,000
c. $41,000
d. he has no owners' equity.

Answer 1

To calculate owners' equity for Caleb's surf shop, subtract the total liabilities from the total assets. The owners' equity is $53,000.

Step-by-step explanation:

To calculate owners' equity, we need to subtract the total liabilities from the total assets. The total assets include both current assets and fixed assets.

1. Current assets: $65,000 + $41,000 (accounts receivable) = $106,000
2. Fixed assets: $104,000
3. Total assets: $106,000 + $104,000 = $210,000
4. Total liabilities: $157,000
5. Owners' equity = Total assets - Total liabilities = $210,000 - $157,000 = $53,000

Therefore, the owners' equity for Caleb's surf shop is $53,000.