On June 30 of the current year, the assets and liabilities of Phoenix, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year?
A) $8,300
B) $13,050
C) $20,500
D) $31,100
E) $40,400

Question

Quizplus · Accepted Answer

To find the owner's equity, we must subtract the liabilities from the assets. 
Assets: 
Cash $20,500 
Accounts Receivable $7,250 
Supplies $650 
Equipment $12,000 
Total Assets $40,400

Liabilities: 
Accounts Payable $9,300

Owner's Equity: 
Total Assets - Liabilities = Owner's Equity 
$40,400 - $9,300 = $31,100.

On June 30 of the Current Year, the Assets and Liabilities