Question

Exerclse 2.1 Determining accounting equation amounts. LO 2-1,2-2 Just before Walker Laboratories opened for business, James Walker, the owner, had the following assets and liabilities. $41,100 76,200 Cash Laboratory Equipment Laboratory Supplies Loan Payable Accounts Payable 7,400 15,700 10,025 Determine the totals that would appear in the firm's fundamental accounting equation. Assets Liabilities Owner's Equity

Answer 1

Assets		$ 1,24,700
Liabilities		$     25,725
Owner's Equity		$     98,975
Working:
# 1	Calculation of assets:
	Cash			$       41,100
	Laboratory Equipment			$       76,200
	Laboratory Supplies			$         7,400
	Total assets			$   1,24,700
# 2	Calculation of Liabilities:
	Loan Payable			$       15,700
	Accounts Payable			$       10,025
	Total Liabilities			$       25,725
# 3	Calculation of owner's Equity:
	As per Balance Sheet Equation,
	Owner's Equity		=	Total assets - Total Liabilities
			=	$   1,24,700	-	$ 25,725
			=	$       98,975