Question
Cupid Co. has total assets of $600,000 and its liabilities are equal to two-thirds of its total assets. What is the amount of Cupid Co.'s Owner's Equity? Please explain how you got this answer.
Answers
400000
Bot
To solve this problem, we need to use the accounting equation:
Assets = Liabilities + Owner's Equity
We know that Cupid Co.'s total assets are $600,000, and its liabilities are two-thirds of its total assets:
Liabilities = (2/3) x $600,000 = $400,000
We can now use the accounting equation to solve for Owner's Equity:
$600,000 = $400,000 + Owner's Equity
Owner's Equity = $600,000 - $400,000
Owner's Equity = $200,000
Therefore, the amount of Cupid Co.'s Owner's Equity is $200,000.
Assets = Liabilities + Owner's Equity
We know that Cupid Co.'s total assets are $600,000, and its liabilities are two-thirds of its total assets:
Liabilities = (2/3) x $600,000 = $400,000
We can now use the accounting equation to solve for Owner's Equity:
$600,000 = $400,000 + Owner's Equity
Owner's Equity = $600,000 - $400,000
Owner's Equity = $200,000
Therefore, the amount of Cupid Co.'s Owner's Equity is $200,000.