Question

Calculate accounting equation capital 100000, purchased goods for cash and credit

Answer 1

Explanation:

A sole proprietorship business owes $12,000 and you, the owner personally invested $100,000 of your own cash into the business. The assets owned by the business will then be calculated as:

$12,000 (what it owes) + $100,000 (what you invested) = $112,000 (what the company has in assets)

Assets = Liabilities + Equity

112,000 = 12,000 100,000

In a sole-proprietorship, equity is actually Owner’s Equity. If the business in question is a corporation, equity will be held by stockholders, which uses stockholder’s equity but the basic equation is the same:

ASSETS = LIABILITIES + EQUITY