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    tinker0419's Avatar
    tinker0419 Posts: 1, Reputation: 1
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    #1

    Jun 17, 2009, 06:00 AM
    Owner's equity, owner's claims and balance sheet
    I need help with the following questions.

    1. On June 30 of the current year, the assets and liabilities of Phoenix Phildell are as follows: Cash, $20,500; Accounts Receivable, $7, 250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year?
    a. $8,300
    b. $13,500
    c. $20,500 (answer)
    d. $31,100
    e. $40,400

    2. The balance sheet equation is:
    a. Revenues minus expenses equals net income.
    b. Debits equal credits.
    c. The bookkeeping phase of accounting.
    d. Another name for the accounting equation.
    e. Assets minus liabilities and equity. (answer)

    3. The assets of a company total $200,000; the liabilities, $700,000. What are the claims of the owners?
    a. $900,000
    b. $700,000
    c. $500,000
    d. $200,000
    e. It is impossible to determine unless the amount of this owner's investment is known.

    I do not know the answer to this question.
    Annettee's Avatar
    Annettee Posts: 1, Reputation: 1
    New Member
    		  
    #2

    Jun 17, 2009, 06:26 AM

    Hi,

    I shall try. Please correct me anyone if I'm wrong.

    Q1 - d - Add Cash, A/R, Supplies & Equipment and minus A/P.
    Q2 - e
    Q3 - e. The asset of the company is less than the liabilities.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #3

    Jun 18, 2009, 11:54 AM

    Owners' Equity = Assets minus Liabilitites.

    The Accounting Equation is:
    Assets = Liabilities + Owners' Equity
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