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Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
Edition 26ISBN: 978-1285743615Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
Edition 26ISBN: 978-1285743615 Exercise 2
Accounting equation
The total assets and total liabilities (in millions) of Green Mountain Coffee Roasters, Inc. and Starbucks Corporation follow:
Determine the owners' equity of each company.
The total assets and total liabilities (in millions) of Green Mountain Coffee Roasters, Inc. and Starbucks Corporation follow:
Determine the owners' equity of each company.
Explanation
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Accounting equation:
The accounting equation states that the assets of a business are always equal to the claims of owners and the outsiders. The claims also called equity of owners is termed as capital and that of outsiders, as liabilities.
Assets = Liabilities + Owner's Equity
Assets = Liabilities + Owner's Equity for GM
Owner's Equity for GM = Assets - Liabilities
= $ 3,616 - $ 1,345
= $ 2,271
Assets = Liabilities + Owner's Equity for Star
Owner's Equity for Star = Assets - Liabilities
= $ 8,219 - $ 3,110
= $ 5109
The accounting equation states that the assets of a business are always equal to the claims of owners and the outsiders. The claims also called equity of owners is termed as capital and that of outsiders, as liabilities.
Assets = Liabilities + Owner's Equity
Assets = Liabilities + Owner's Equity for GM
Owner's Equity for GM = Assets - Liabilities
= $ 3,616 - $ 1,345
= $ 2,271
Assets = Liabilities + Owner's Equity for Star
Owner's Equity for Star = Assets - Liabilities
= $ 8,219 - $ 3,110
= $ 5109
Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
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