At the end of its first month of operations, Michael’s Consulting Services reported net income of $25,000. They also had account balances of: Cash, $18,000; Office Supplies, $2,000 and Accounts Receivable $10,000. The sole stockholder’s total investment in exchange for common stock for this first month was $5,000. There were no dividends in the first month. Calculate the amount of total equity to be reported on the balance sheet at the end of the month.

Respuesta :

Answer:

30,000

Explanation:

we solve usign the accounting equation

Assets = Liabilities + Equity

Assets:

cash 18,000

account receivable 10,000

supplies 2,000

Total 30,000

As there are no debt, equity will be equal to total assets.

30,000 = 0  + Equity

Equity = 30,000