Question

Chantelle, a small business owner, notes her business has an accounts payable balance of $1,500, a cash balance of $2,400, equipment with a net book value of $6,300, a vehicle with a net book value of $5,800, and a bank loan balance of $9,500. What is the book value of Chantelle’s equity?

Answer 1

The book value of Chantelle's equity is $3000.

Given:

Accounts Payable - $1500

Cash Balance - $2400

Equipment of net book value - $6300

A vehicle with net book value - $5800

A bank loan - $9500

To find:

The value of Chantelle's equity

Solution:

Accounts Payable - $1500

Cash Balance - $2400

Equipment of net book value - $6300

A vehicle with net book value - $5800

Assets

Cash Balance - $2400

Equipment of net book value - $6300

A vehicle with net book value - $5800

$Total \: Assets = 2400 + 6300 + 5800$

$Total \: Assets = 14500$

Liabilities

Accounts Payable -$1500

A bank loan -$9500

$Total \: Liabilities =1500 + 9500$

$Total \: Liabilities = 11000$

Equity:

$Equity =Total \: Assets - Total \: Liabilities$

$Equity = 14000 - 11000$

$Equity = 3000$

Therefore, the book value of Chantelle's equity is $3000.