Flores Realty Company had the following balance sheet accounts and balances: $\begin{array}{lrlr}
\text { Accounts Payable } & \$ 6,000 & \text { Earl Flores, Capital } & ? \
\text { Accounts Receivable } & 1,000 & \text { Equipment } & \$ 7,000 \
\text { Building } & 8,000 & \text { Land } & 7,000 \
\text { Cash } & 3,000 & & \
\end{array}$ If the equipment were sold for $7,000, what would be the total of owner's equity?

Question

Quizplus · Accepted Answer

The total of owner's equity is equal to the total assets minus the total liabilities. If the equipment were sold for $7,000, the total assets would be $23,000 ($8,000 + $7,000 + $7,000 + $1,000). The total liabilities would be $6,000. Therefore, the total of owner's equity would be $23,000 - $6,000 = $17,000.

Flores Realty Company Had the Following Balance Sheet Accounts and Balances