If the balance sheet shows liabilities of $46,000 and assets of $83,000, the owner's total equity is $37,000.
Capital is defined as the percentage of the total value of a company's assets available to owners (sole proprietors or partnerships) and shareholders (in the case of legal entities). It is calculated by subtracting all liabilities from the total value of assets (Equity = Assets - Liabilities).
Capital is generally considered to be one of the three main aspects of a company's finances. This is because it forms part of the accounting equation Equity = Assets - Liabilities. This equation is most commonly associated with sole proprietorships. In general, it is the financial ownership of the company.
Total capital is the value remaining in a company after subtracting total liabilities from total assets. The formula to calculate total equity is Equity = Assets - Liabilities.
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