Question

If capital of the buisness is 125000 and outside liabilities are 25000 calculate total equity of business

Answer 1

Example :-

If total assets of a business are Rs. 1,80,000 and total outside liabilities are Rs. 50,000, the net worth of the firm will be ___________.

Assets = Rs. 1,80,000; Net worth or Owner's Equity = ?; Outside Liability = Rs. 50,000

The accounting equation is:

Assets = Outside Liability + Owner's Equity or Net Worth

Rs. 1,80,000 = Rs. 50,000 + Owner's Equity or Net Worth

Owner's Equity or Net Worth = Rs. 1,80,000 - Rs. 50,000

Owner's Equity or Net Worth = Rs. 1,30,000

Answer 2

Answer:

Capital = 1,25,000

Outside liabilities = 25,000

..

..

Total equity of business = Capital + outside liabilities = 1,25,000+25,000

= 1,50,000