Question

question 8 of 10
cash $ 25,045
accounts receivable 19,056
equipment 114,879
total assets $ 196,547
liabilities and owner’s equity
liabilities
accounts payable $ 11,978
notes payable 65,334
total liabilities 77,312
owner’s equity
119,547
owner’s equity $ 196,547
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Explanation:

Step1: Recall the accounting equation

The basic accounting equation is \( \text{Assets} = \text{Liabilities} + \text{Owner's Equity} \). We can also use this to find missing components. Here, we can check if the sum of liabilities and owner's equity equals total assets.

Step2: Calculate Total Liabilities

To find Total Liabilities, we sum Accounts Payable and Notes Payable.
Accounts Payable = \( \$11,978 \), Notes Payable = \( \$65,334 \)
So, Total Liabilities = \( 11,978 + 65,334 = 77,312 \) (which matches the given Total Liabilities, so that's a check).

Step3: Calculate Owner's Equity

Using the accounting equation \( \text{Owner's Equity} = \text{Total Assets} - \text{Total Liabilities} \)
Total Assets = \( \$196,547 \), Total Liabilities = \( \$77,312 \)
Owner's Equity = \( 196,547 - 77,312 = 119,235 \)? Wait, but the given Owner's Equity is \( 119,547 \). Wait, maybe we check the asset sum first.

Step4: Check Total Assets

Sum of Cash, Accounts Receivable, and Equipment:
Cash = \( 25,045 \), Accounts Receivable = \( 19,056 \), Equipment = \( 114,879 \)
Sum = \( 25,045 + 19,056 + 114,879 \)
First, \( 25,045 + 19,056 = 44,101 \)
Then, \( 44,101 + 114,879 = 158,980 \). Wait, but the given Total Assets is \( 196,547 \). There's a discrepancy. Wait, maybe the problem is to fill in the missing Owner's Equity or check the equation. Wait, the Owner's Equity field is filled as 119,547. Let's check \( 77,312 + 119,547 = 196,859 \), which is not equal to 196,547. Wait, maybe a typo, but assuming we need to find Owner's Equity correctly:

Owner's Equity = Total Assets - Total Liabilities = \( 196,547 - 77,312 = 119,235 \). But the given is 119,547. Alternatively, maybe the asset sum is wrong. Wait, 25,045 + 19,056 = 44,101; 44,101 + 114,879 = 158,980. Then 158,980 +? = 196,547. So the missing asset? Wait, maybe there's another asset. But the problem shows Cash, Accounts Receivable, Equipment as assets. Wait, maybe the user is to verify or fill. But the main thing is using the accounting equation.

Wait, the problem might be to confirm the Owner's Equity. Let's recalculate:

Total Assets = 25,045 + 19,056 + 114,879 = 25,045 + 19,056 = 44,101; 44,101 + 114,879 = 158,980. But the Total Assets is given as 196,547. So there's a missing asset? Or maybe the numbers are correct and we proceed.

Alternatively, if we take the given Total Assets (196,547) and Total Liabilities (77,312), then Owner's Equity should be \( 196,547 - 77,312 = 119,235 \). But the box has 119,547. Maybe a mistake in the problem, but the process is using the accounting equation.

Answer:

To find Owner's Equity, use \( \text{Owner's Equity} = \text{Total Assets} - \text{Total Liabilities} \).
Total Assets = \( \$196,547 \), Total Liabilities = \( \$77,312 \)
Owner's Equity = \( 196,547 - 77,312 = \boldsymbol{119,235} \) (note: discrepancy with given 119,547 may be a problem error, but this is the correct calculation via the accounting equation).

(If checking asset sum: Cash + Accounts Receivable + Equipment = \( 25,045 + 19,056 + 114,879 = 158,980 \), which is not equal to given Total Assets \( 196,547 \), so there may be a missing asset or a typo.)