Question

Doughnut Doughnut Enterprises has $ 39 comma 000$39,000 in​ cash, $ 10 comma 000$10,000 in​ inventory, $ 26 comma 000$26,000 balance due to​ creditors, and $ 21 comma 000$21,000 balance due from customers. What is the amount of​ owners' equity

Answer 1

Answer:

The answer is $44,000

Explanation:

Accounting equation:

Asset = Equity + Liability

OR Equity = Asset - Liability.

Assets are what the business or firms own and control. Example, cash, inventory, accounts receivable etc.

While liabilities are what the business owe and must repay. For example, accounts payable etc.

In the question, assets are cash, inventory, accounts receivable (balance due from customers). So for assets, we have:

$39,000 + $10,000 + $21,000

=$79,000.

Liability is $26,000.

Therefore, equity is $79,000 - $26,000= $44,000