Shane, Inc., has completed its fiscal year and reported Total Assets of $1,000,000 and Total Liabilities of $300,000. Calculate the value of common equity.
A) $1,300,000
B) $700,000
C) $600,000
D) $800,000

Question

Quizplus · Accepted Answer

We can use the accounting equation: Total Assets = Total Liabilities + Common Equity. 
Rearranging the equation, we get: Common Equity = Total Assets - Total Liabilities 
Substituting the given values, we get: Common Equity = $1,000,000 - $300,000 = $700,000. Therefore, the value of common equity is $700,000, which is option B.