Holden's equity is calculated from his assets and liabilities. If total assets are $31,900 and total liabilities are $18,200, what is equity?

Holden's equity is calculated from his assets and liabilities. If total assets are $31,900 and total liabilities are $18,200, what is equity?

• A. $13,700
• B. $14,100
• C. $13,900
• D. $13,500

Answer: (A)

Equity is what remains for the owners after all debts have been accounted for. It comes from the equation: Assets = Liabilities + Equity, so Equity = Assets − Liabilities. Here, subtract the liabilities from the assets: 31,900 − 18,200 = 13,700. So Holden’s equity is 13,700 dollars. The other numbers would result from using a different operation (like adding instead of subtracting), which doesn’t reflect the ownership claim after debts.

Equity is what remains for the owners after all debts have been accounted for. It comes from the equation: Assets = Liabilities + Equity, so Equity = Assets − Liabilities.

Here, subtract the liabilities from the assets: 31,900 − 18,200 = 13,700. So Holden’s equity is 13,700 dollars. The other numbers would result from using a different operation (like adding instead of subtracting), which doesn’t reflect the ownership claim after debts.