The resources owned by David\'s Spa and Salon total $148,000. The total amount o

Question

The resources owned by David's Spa and Salon total $148,000. The total amount of debt that it owes to others is $87,000. Which of the following is correct? David's owners' equity is $87,000. The owners' equity in David's is $61,000. David's liabilities are $148,000. The firm's liabilities are $61,000. The firm has more owners' equity than liabilities. The resources owned by David's Spa and Salon total $148,000. The total amount of debt that it owes to others is $87,000. Which of the following is correct? The resources owned by David's Spa and Salon total $148,000. The total amount of debt that it owes to others is $87,000. Which of the following is correct? David's owners' equity is $87,000. The owners' equity in David's is $61,000. David's liabilities are $148,000. The firm's liabilities are $61,000. The firm has more owners' equity than liabilities. David's owners' equity is $87,000. The owners' equity in David's is $61,000. David's liabilities are $148,000. The firm's liabilities are $61,000. The firm has more owners' equity than liabilities.

Explanation / Answer

OPTION B The owners' equity in David's is $61,000.

Equity + Debt = Total Resources
Equity + 87000 = 148000
Equity = $61000

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