Question

using the balance sheet, calculate xyz companys owners equity.
xyz company - balance sheet
assets | liabilities
cash $28,000 | notes $28,000
inventory $27,000 | wages $27,000
property $86,000 |
| owner’s equity
| stock $32,000
| investment $54,000
owner’s equity = $?

Explanation:

Step1: Calculate Total Assets

To find total assets, we sum up the values of Cash, Inventory, and Property.

$$ \text{Total Assets} = 28000 + 27000 + 86000 $$

$$ \text{Total Assets} = 141000 $$

Step2: Calculate Total Liabilities

To find total liabilities, we sum up the values of Notes and Wages.

$$ \text{Total Liabilities} = 28000 + 27000 $$

$$ \text{Total Liabilities} = 55000 $$

Step3: Use the Accounting Equation (Assets = Liabilities + Owner's Equity) to find Owner's Equity

We know that \( \text{Assets} = \text{Liabilities} + \text{Owner's Equity} \), so we can rearrange it to find Owner's Equity: \( \text{Owner's Equity} = \text{Assets} - \text{Liabilities} \)
First, we also have the given components of Owner's Equity (Stock and Investment), but we can verify using the accounting equation. Let's first calculate using the equation:

$$ \text{Owner's Equity (from equation)} = 141000 - 55000 = 86000 $$

Now, let's check by summing Stock and Investment: \( 32000 + 54000 = 86000 \), which matches. So the Owner's Equity is the sum of Stock and Investment (or Assets - Liabilities).

Answer:

86000