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the accounting equation is used to develop the organization financial reports. 1

ID: 2571943 • Letter: T

Question

the accounting equation is used to develop the organization financial reports. 1. describe what owners equity values would be if Assets are $100,000 and Liabilities are $ 35,000 by showing the Account Equation and provide an explanation of what accounts could be found in owners equity . the accounting equation is used to develop the organization financial reports. 1. describe what owners equity values would be if Assets are $100,000 and Liabilities are $ 35,000 by showing the Account Equation and provide an explanation of what accounts could be found in owners equity . the accounting equation is used to develop the organization financial reports. 1. describe what owners equity values would be if Assets are $100,000 and Liabilities are $ 35,000 by showing the Account Equation and provide an explanation of what accounts could be found in owners equity .

Explanation / Answer

Owners Equity is the difference between Assets and Liabilities.

Owners Equity when Assets and liabilities are given is as calculated below:

Assets = Liabilities + Owners Equity

100,000 = 35,000 + Owners Equity

Owners Equity = $65,000

Owners Equity consists of the owner capital and net profit earned during the year and drawings which are withdrawn by owner during the year.