Doug John is the owner and operator of John's Janitorial Services. At the end of its accounting period, December 31, John's Janitorial Services has assets of $500,000 and liabilities of $275,000. Using the accounting equation, what is the owner's equity?

Answer 1

The accounting equation states that:

Assets = Liabilities + Owner's Equity

To find the owner's equity, you can rearrange the equation:

Owner's Equity = Assets - Liabilities

Given the values:

• Assets = $500,000
• Liabilities = $275,000

Now, plug in the numbers:

Owner's Equity = $500,000 - $275,000
Owner's Equity = $225,000

Therefore, the owner's equity for Doug John's John's Janitorial Services is $225,000.