Question

On December 31 of the current year, the assets and liabilities of Tree, Inc. are as follows: Cash $30,000; Supplies, $600; Equipment, $10,000; Accounts Payable, $8,500. What is the amount of equity as of December 31 of the current year?

Answer 1

Answer:

$32,100

Explanation:

We know that

Total assets = Total liabilities + Shareholder equity

Where,

Total assets = Cash + supplies + equipment

                    = $30,000 + $600 + $10,000

                    = $40,600

And, the total liabilities would be

= Account payable

= $8,500

So, the amount of equity would be

= $40,600 - $8,500

= $32,100