The business equity at the end of the first year was $66000 for a business that had $90,000 in total assets and $24,000 in total liabilities.
Any valuable property that a business holds, including machinery, real estate, structures, and intellectual property, is referred to as an asset.
A company's liabilities include all outstanding debts, including bank loans, mortgages, unpaid accounts, IOUs, and other amounts owed to third parties.
Equity tells you how much value is left over after adding up all of the valued possessions and deducting all of the debts to creditors. Equity for a small business owner is the company's net worth.
Keeping these terms in mind, solve the question as instructed below:
Given:
Assets = $90,000
Liabilities = $24,000
Equity = x
Formula to be used:
The accounting equation is always: Assets = Liabilities + Equity
After putting the values in the formula we get:
$90,000 = $24,000 + x
$90,000 - $24,000 = x
$66000 = x
So, the total business equity at the end of the first year was $66000.
Learn more about balance sheets, assets, liabilities, and equity here:
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