Answer:
The total for assets, liabilities, and equity:
Total assets $28,000
Total liabilities $13,000
Total equity $15,000
Explanation:
a) Data and Calculations:
Cash: $10,000
Accounts Receivable: $2,000
Office Supplies: $1,000
Furniture: $15,000
Total assets $28,000
Accounts Payable: $3,000
Notes Payable: $10,000
Total liabilities $13,000
Equity: $5,000
Retained Earnings $10,000
Total equity $15,000
Retained Earnings = Assets - (Liabilities + Equity)
b) The accounting equation states that assets = liabilities + equity. This equation is always true with each transaction that occurs, provided it is correctly posted. It is the basis of the double-entry system of accounting with each transaction affecting at least two accounts.
