Explanation Accounting equation : Accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of a company, and claims on the resources by the creditors and the owners. Accounting equation is expressed as shown below: Assets = Liabilities + Stockholders' equity Calculate the value of stockholders equity Here, Assets = $252,000 (1) Liabilities = $189,000 (2) Assets = Liabilities + Stockholders' equity $252,000 = $189,000+ Stockholder's equity Stockholder's equity = $252,000 − $ 189 , 000 = $ 63 , 000 Hence, the value of stockholder’s equity is $63,000

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ISBN: 9780134728858

Author: Kemp

Publisher: PEARSON CO

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EP FINANCIAL ACCOUNTING-MYACCOUNTINGLAB

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Solution Summary: The author explains that accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of the company, and claims by the creditors and the owners.

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