How would you solve this with the fundamental accounting equation?
Assets=Liabilities+Owner Equity
The equity of the owner of a van that cost 32,000, who owe 8,400 on an installment loan payable to the bank?
Assuming that when you say the van costs $32,000, that the van is actually currently worth 32,000:
Assets = $32000 (value of van)
Liability = $8400 (amt. of loan)
A = L + E
E = A - L
E = 32,000 - 8400 = $23,600
Florrie,
ReplyDeleteMight I ask was that from the College Accounting 1-13 Houghton Mifflin book? and you don't by any chance still have the CD or the exercise answers do you?I am trying to refresh myself by going back over the book and need the answers to check against mine. Thank you.
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