When reviewing the balance sheet for Preferred Pet Care, Inc., a mobile small animal care business, Julian noted the following information: Company assets totaling $3.5 million, and liabilities totaling $1.3 million. On paper, the net worth (owners' equity) for this business = ____________.
A) $2.2 million.
B) $4.8 million.
C) $3.5 million.
D) $0.2 million.

Question

Quizplus · Accepted Answer

Net worth or owners' equity is calculated by subtracting total liabilities from total assets. Therefore, the net worth for Preferred Pet Care, Inc. would be $3.5 million - $1.3 million = $2.2 million.

When Reviewing the Balance Sheet for Preferred Pet Care, Inc