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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Dr. L. M. Patton is an ophthalmologist. As of December 31, Dr. Patton owned the following property that related to his professional practice, Patton Eye Clinic:

Cash, $2,995

Professional Equipment, $63,000

Office Equipment, $8,450

On the same date, he owed the following business creditors:

Munez Supply Company, $3,816

Martin Equipment Sales, $3,728

Compute the following amounts in the accounting equation:

Assets $______ = Liabilities $______ + Owner’s Equity $______

To determine

Ascertain the values of assets, liabilities, and owners’ equity from the given information, using accounting equation.

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

Ascertain the values of assets, liabilities, and owners’ equity from the given information, using accounting equation.

Step 1: Compute the amount of total assets.

DetailsAmount ($)
Cash$2,995
Professional equipment63,000
Office equipment8,450
Total assets$74,445

Table (1)

Step 2: Compute the amount of total liabilities

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