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Holden owns a restaurant. His assets include $6,500 in cash, $2,400 in inventory, $8,000 in equipment, and $15,000 for a delivery vehicle. His liabilities include a $3,500 credit card balance, $2,200 in bank loans, and $12,500 in mortgage payments for the restaurant. What is Holden's equity?

o o o o
$13,500
$14,100
$13,700
$13, 900

Answer 1

Equity = Assets − Liabilities.

Assets = 6,500 + 2,400 + 8,000 + 15,000 = 31,900
Liabilities = 3,500 + 2,200 + 12,500 = 18,200

Equity = 31,900 − 18,200 = $13,700.