The following items are components of a traditional balance sheet. How much is the total equity of the firm?

Question

Quizplus · Accepted Answer

Total equity can be calculated as Assets - Liabilities. From the given traditional balance sheet, we have:
Assets:
Cash = $10,000
Accounts Receivable = $25,000
Inventory = $37,000
Total Assets = $72,000

Liabilities:
Accounts Payable = $10,000
Notes Payable = $13,000
Total Liabilities = $23,000

Equity = Total Assets - Total Liabilities
Equity = $72,000 - $23,000
Equity = $49,000
Therefore, the answer is B.

The Following Items Are Components of a Traditional Balance Sheet