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.
2 answers
400000
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.