Calculate owner's equity from the following information: Expenses $700,000
Return on equity 40%
Total Assets $2,050,000
Sales $1,500,000
A) $2,000,000
B) $800,000
C) $375,000
D) $1,250,000
E) $820,000

Question

Quizplus · Accepted Answer

Return on equity = Net income / Owner's equity40% = (Sales - Expenses) / Owner's equity40% = (1,500,000 - 700,000) / Owner's equity40% = 800,000 / Owner's equityOwner's equity = 800,000 / 40%Owner's equity = 2,000,000

Calculate Owner's Equity from the Following Information: Expenses $700,000