James has a business mowing lawns.On 31 December 2016,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) $110
B) $2590
C) $2810
D) $7810

Question

Quizplus · Accepted Answer

To calculate James's owners' equity, we need to subtract all the liabilities from the total assets.
Total assets = $7000 (utility truck) + $250 (mower) + $110 (edger) + $360 (accounts receivable) + $110 (cash in bank) + $70 (fuel on hand) = $7890
Total liabilities = $90 (accounts payable) + $5000 (long-term loan from sister) = $5090
Owners' equity = Total assets - Total liabilities = $7890 - $5090 = $2800
Therefore, the best choice is C, which is the closest option to $2800.

James Has a Business Mowing Lawns