Accounts for Excavators Ltd are as follows:Cash $8,000Accounts payable 15,000Wages payable 2,000Inventory 8,500Accounts receivable 4,200Equipment 14,500Loan payable 15,000Motor vehicles 22,000 What is the amount for equity?
Question
Accounts for Excavators Ltd are as follows:Cash $8,000Accounts payable 15,000Wages payable 2,000Inventory 8,500Accounts receivable 4,200Equipment 14,500Loan payable 15,000Motor vehicles 22,000 What is the amount for equity?
Solution
To calculate equity, we first need to calculate the total assets and total liabilities of Excavators Ltd.
Total assets are the sum of cash, inventory, accounts receivable, equipment, and motor vehicles.
Total Assets = Cash + Inventory + Accounts Receivable + Equipment + Motor Vehicles Total Assets = 8,500 + 14,500 + 57,200
Total liabilities are the sum of accounts payable, wages payable, and loan payable.
Total Liabilities = Accounts Payable + Wages Payable + Loan Payable Total Liabilities = 2,000 + 32,000
Equity is calculated by subtracting total liabilities from total assets.
Equity = Total Assets - Total Liabilities Equity = 32,000 = $25,200
So, the amount for equity is $25,200.
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