Bruce operates a coffee stall at the university.On 30 June 2012,he has $400 in his business bank account,the stall and equipment are worth $5200,ingredients on hand cost $60 and paper cups cost $10.Students owe him $120 and he owes his suppliers $370.He also owes his mother $4100,which enabled him to get started.What is Bruce's owners' equity?
A) $5420
B) $1320
C) $400
D) $4000.

Question

Quizplus · Accepted Answer

To calculate owner's equity, we need to subtract total liabilities from total assets.

Total assets = (Bank account balance + Value of stall and equipment + Ingredients on hand + Paper cups + Amount owed by students) = ($400 + $5200 + $60 + $10 + $120) = $5800

Total liabilities = (Amount owed to suppliers + Amount owed to mother) = ($370 + $4100) = $4470

Owner's equity = Total assets - Total liabilities = $5800 - $4470 = $1330

So, the closest option is B) $1320.

Bruce Operates a Coffee Stall at the University