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Payday Loan in Mississippi

    I only just started accounting today, help! If Mr Smith has the following assets and liabilities, what is the investment in the business? Cash in hand - $1,000 Loan From bank - $4,000 Accounts Payable - $500 Accounts Receivable - $8,000 Inventories - $2,000 Furniture - $3,500 2nd. C black, a plumber, gives you the following list of items. Use the accounting equation to determine the total value of assets: Amount Owning to Tim McClean: $1,000 Value of pipes held - $8,000 Loan From Bank - $1,000 Amount owing by Charles Fray - $1,000 New equipment purchased - $ 3,000 Value of Car - $15,000 C black's investment in the business - $25,000

    1) Assets Cash in hand - $1,000 Accounts Receivable - $8,000 Inventories - $2,000 Furniture - $3,500 Total Assets = 14,500 Liabilities Loan From bank - $4,000 Accounts Payable - $500 Total Liabilities = 4,500 Basic Accounting Equation Assets = Liabilities + Equity (this is owner investment) 14,500 = 4,500 + Equity Equity = 10,000 2) Liabilities Amount Owning to Tim McClean: $1,000 Loan From Bank - $1,000 Equity C black's investment in the business - $25,000 Assets = 2,000 + 25,000 Assets = 27,000 You really didn't need the accounting equation. You could just as well have added up the assets given. Value of pipes held - $8,000 Amount owing by Charles Fray - $1,000 New equipment purchased - $ 3,000 Value of Car - $15,000


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