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swat32
3 years ago
13

At the end of its first month of operations, Michael’s Consulting Services reported net income of $25,000. They also had account

balances of: Cash, $18,000; Office Supplies, $2,000 and Accounts Receivable $10,000. The sole stockholder’s total investment in exchange for common stock for this first month was $5,000. There were no dividends in the first month. Calculate the amount of total equity to be reported on the balance sheet at the end of the month.
Business
1 answer:
DENIUS [597]3 years ago
7 0

Answer:

30,000

Explanation:

<u>we solve usign the accounting equation</u>

Assets = Liabilities + Equity

Assets:

cash 18,000

account receivable 10,000

supplies 2,000

Total 30,000

As there are no debt, equity will be equal to total assets.

30,000 = 0  + Equity

Equity = 30,000

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