Question

Assets and liabilities of a company are $150,000 and $30,000, respectively. Determine stockholders' equity using the accounting equation.

Answer 1

Answer:

Stockholders' equity using the accounting equation is $ 120,000.

Explanation:

The accounting equation is that assets of a business is equal to its liability and equity. So in order to calculate equity we will deduct liabilities from assets. Detail calculations are given below.

Assets = Liability + stockholders equity

150,000 = 30,000 + stockholders equity

stockholders equity = $ 120,000