you work for a small business that reports the following on its balance sheet: $12,000 in assets and $2,500…

you work for a small business that reports the following on its balance sheet: $12,000 in assets and $2,500 in liabilities. how much is the owners equity?

you work for a small business that reports the following on its balance sheet: $12,000 in assets and $2,500 in liabilities. how much is the owners equity?

Answer

Explanation:

Step1: Recall accounting - equation

The accounting equation is Assets = Liabilities + Owner's Equity. We need to solve for Owner's Equity, so we can rewrite the equation as Owner's Equity = Assets - Liabilities.

Step2: Substitute values

Given Assets = $12000 and Liabilities = $2500. Then Owner's Equity = $12000 - $2500.

Step3: Calculate

$12000−$2500 = $9500.

Answer:

$9500