The Balance Sheet for Renuvation LLC shows assets totaling $107,000 and liabilities totaling $75,000.Which of the following statements is correct?
A)Owner's Equity equals $182,000.
B)Current Assets are worth $32,000.
C)Net Income for the period is $32,000.
D)Owner's Equity equals $32,000.

Question

Quizplus · Accepted Answer

The balance sheet equation is Assets = Liabilities + Owner's Equity. Therefore, Owner's Equity = Assets - Liabilities, which in this case is $107,000 - $75,000 = $32,000. Therefore, option D is correct. Option A is incorrect because it is not possible for Owner's Equity to be larger than the total assets. Option B is incorrect because it presents a specific figure for current assets, which cannot be determined from the information given. Option C is incorrect because there is no information provided about net income.

The Balance Sheet for Renuvation LLC Shows Assets Totaling $107,000