Solway Company is a sole proprietorship whose owner, Joe Solway, has an equity interest of
$50,000. Had Solway been a partnership rather than a sole proprietorship, and the two equal part-
ners were Joe and his brother Tom, how would the $50,000 owners’ equity be presented in the
company’s balance sheet?
Answers
Answer:
Solway Company is a sole proprietorship whose owner, Joe Solway, has an equity interest
Explanation:
If Solway company was a partnership rather than a sole proprietorship, then the owner's equity of $ 50,000 will be shown as Partner's capital of $ 25,000 each.
Joe solway, Capital A/c 25000
Tom Solway, capital A/c 25000
Total Partner's Equity 50000
A sole proprietorship is a type of business that is owned and operated by one person and in which there is no legal separation between the owner and the business entity. It is also referred to as a lone tradership, individual entrepreneurship, or proprietorship. A solitary proprietor may hire employees in addition to doing their own business.
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