Question

The Balance Sheet for Renuvation LLC shows assets totaling $107,000 and liabilities totaling $75,000. Which of the following statements is correct?
A. Owner's Equity equals $182,000.
B. Current Assets are worth $32,000.
C. Net Income for the period is $32,000.
D. Owner's Equity equals $32,000.

Answer 1

Answer:

D. Owner's Equity equals $32,000.

Explanation:

In this, the accounting equation is used which is shown below:  

Total assets = Total liabilities + stockholder equity  

where,

Total assets is $107,000

And, the total liabilities is $75,000

Now put these values to the above formula  

So, the value would equal to

$107,000 = $75,000 + stockholder equity  

So, the stockholder equity would be

= $107,000 - $75,000

= $32,000

This accounting equation equates and balanced the balance sheet