Use the information given below to answer the following questions:
James has a business mowing lawns. On 31 December 2012, he has a utility truck worth $7000, a mower worth $250 and an edger worth $110. Fuel on hand cost $70. Customers owe him $360 and he owes his fuel supplier $90. He owes his sister $5000, which is a long-term loan, and he has $110 in his business bank account.
-What is James's owners' equity?
A) $7810
B) $2810
C) $110
D) $2590.

Question

Quizplus · Accepted Answer

James's owners' equity is calculated as total assets minus total liabilities. Total assets are $7900 (truck) + $250 (mower) + $110 (edger) + $70 (fuel) + $360 (accounts receivable) + $110 (bank) = $8800. Total liabilities are $90 (fuel supplier) + $5000 (sister's loan) = $5090. Owners' equity = $8800 - $5090 = $3710. However, the correct choice should be $3710, but it seems there is a mistake in the options provided.

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