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Q20E

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 37

Short Answer

Compute the missing amount in the accounting equation for each entity from the financial information presented:

Assets Liabilities Equity

Hair Styles $ ? $ 36,000 $ 36,000

Style Cuts 90,000 ? 48,000

Your Basket 101,000 68,000 ?

Assets equals: $72,000

Liabilities: $42,000

Equity: $33,000

See the step by step solution

Step by Step Solution

Step-by-Step-SolutionStep 1: Calculation of Assets

Assets is calculated as follows:

Step 2: Calculation of Liabilities

Liabilities is calculated as follows:

Step 3: Calculation of Equity

Equity is calculated as follows:

Thus, in case of Hair styles’ assets equals $72,000, Style Cuts’ liabilities equals $42,000, and Your Basket’s equity equals $33,000.

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