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-   -   Investment by owners? (https://www.askmehelpdesk.com/showthread.php?t=172719)

  • Jan 15, 2008, 01:09 PM
    jahubb
    Investment by owners?
    If a company has assets of $350,000, liabilities of $310,000, and retained earnings of $180,000, investments by owners must be?
    A. $40,000
    B. $225,000
    C. $295,000
    D. $310,000
    I answered D. my answer was wrong. Can someone please tell me what I did wrong.
    Thank You in advance
  • Jan 17, 2008, 12:32 PM
    pready
    The Accounting equation is:

    Assets = Liabilities + Owners Equity
    Therefore:

    $350,000 Assets - $310,000 Liabilities = Owners Esquity

    Owners Equity = $40,000
  • Jan 17, 2008, 10:48 PM
    jahubb
    Thank You, I figured it out, It was the wording, Investments vs. Owners Equity. I feel really stupid. Thank You

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