at the beginning of the year morissa Pineda, owner of La Sierra enterprises has total assets of 2,500,000 and total liabilities of 1,200,000 if total assets increased to 2,750,000 while there was a decrease in total liabilities from 1,200,000 down to 1,000,000 what is the amount to represent the residual claim of the owner?
Answers
Answer:
The right of a shareholder or some other party to the profit of a company after all prior obligations have been paid. Equity claims are perhaps most important in the event of the company's liquidation. Equity claims are also called residual claims.
Explanation:
What is Owner’s Equity?
Owner’s Equity is defined as the proportion of the total value of a company’s assets that can be claimed by its owners (sole proprietorship or partnership) and by its shareholders (if it is a corporation). It is calculated by deducting all liabilities from the total value of an asset (Equity = Assets – Liabilities). The liabilities represent the amount owed by the owner to lenders, creditors, investors, and other individuals or institutions who contributed to the purchase of the asset. The only difference between owner’s equity and shareholder’s equity is whether the business is tightly held (Owner’s) or widely held (Shareholder’s).