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The FastForward Company balance sheet shows cash $5,000, accounts receivable $7,000, office equipment $3,000, and accounts payable $4,000. What is the amount of equity?  a$12,000 b$15,000 c$11,000 d$1,000

Question

The FastForward Company balance sheet shows cash 5,000,accountsreceivable5,000, accounts receivable 7,000, office equipment 3,000,andaccountspayable3,000, and accounts payable 4,000. What is the amount of equity?  a12,000b12,000 b15,000 c11,000d11,000 d1,000

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Solution

To calculate equity, you need to subtract the company's total liabilities from its total assets.

In this case, the total assets are the sum of cash, accounts receivable, and office equipment. So, 5,000(cash)+5,000 (cash) + 7,000 (accounts receivable) + 3,000(officeequipment)=3,000 (office equipment) = 15,000.

The total liabilities are the accounts payable, which is $4,000.

So, the equity is 15,000(totalassets)15,000 (total assets) - 4,000 (total liabilities) = $11,000.

So, the answer is c$11,000.

This problem has been solved

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