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Assets & Liabilities: How much was owner's equity on January 31?

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On January 31, an entity's balance sheet showed net assets of $1085 and liabilities of $225. How much was owner's equity on January 31?

Assets = liabilities + owner equity

$1085 = $225 + ?

$1085 - $225 = $860

owner equity = $860 Is this right?

In a different problem assets were listed as "total" assets and gave liabilities and asked to calcualte OE. I did it the same way ...... But now I am not sure if it is supposed to be done differently since it says "net assets" in this problem . The more I read the chapter, the more confused I get.

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You are correct. The fact that in the other problem says Total Assets and this one Net Assets is just to confuse you, but thet essentially mean the ...

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Manal Elkhoshkhany, MBA
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  • MBA, California State University, Sacramento
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