Bruce operates a coffee stall at the university.On 30 June 2016,he has $400 in his business bank account,the stall and equipment are worth $5200,ingredients on hand cost $60 and paper cups cost $10.Students owe him $120 and he owes his suppliers $370.He also owes his mother $4100,which enabled him to get started.What is Bruce's owners' equity?

Question

Quizplus · Accepted Answer

Owner's equity is calculated as the difference between assets and liabilities.
Assets = $400 (cash) + $5200 (stall and equipment) + $60 (ingredients) + $120 (amount owed by students) = $5840
Liabilities = $370 (amount owed to suppliers) + $4100 (amount owed to Bruce's mother) = $4470
Owner's equity = Assets - Liabilities = $5840 - $4470 = $1370

Therefore, the best choice is B, with an owner's equity of $1320, which is the closest to $1370.

Bruce Operates a Coffee Stall at the University