   Chapter 1, Problem 1E

Chapter
Section
Textbook Problem

Complete the following equations: Assets of $40,000 = Liabilities of$17,200 + Owner’s Equity of $_____ Assets of$_____ − Liabilities of $18,000 = Owner’s Equity of$22,000 Assets of $27,000 − Owner’s Equity of$15,000 = Liabilities of $_____ a. To determine Solve for owners’ equity using accounting equation, if assets are$40,000, and liabilities are $17,200. Explanation Accounting equation: Accounting equation is a concept expressed in the form of equation, which creates a relation between resources or assets of a company and claims of resources to creditors and owners. Fundamental accounting equation is expressed as shown below: Assets = Liabilities + Owners' Equity Solve for owners’ equity using accounting equation, if assets are$40,000, and liabilities are $17,200 b. To determine Solve for assets using accounting equation, if liabilities are$18,000 and owners’ equity are $22,000. c. To determine Solve for liabilities using accounting equation, if assets are$27,000 and owners’ equity are \$15,000.

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