Respuesta :
The rights of the owners in the company's assets are known as owner's equity. When referring to a single proprietorship, the phrase "owner's equity" is most suitable, but if the firm is organized as an LLC or a corporation, it may also be referred to as "stockholders equity" or "shareholders equity."
The formula for owner’s equity is:
Owner’s Equity = Assets – Liabilities.
Examples:
Bangalore-based fertiliser business owner Hari is interested in learning how much ownership he has in the company. The property owned by the fertiliser firm is valued at 50 lakhs, the factory's equipment is worth 10 lakhs, and the creditors owe the company about 5 lakhs, according to the balance sheets for the preceding years.
According to certain entries in the balance sheet, Hari owed the bank 15 lakh rupees in debt, had 10 lakh rupees' worth of salary and wages to pay, and had 5 lakh rupees to pay creditors.
Therefore, equity can be calculated as:
Owner’s equity = Assets – Liabilities
Assets = 50,00,000 + 10,00,000 + 5,00,000
= ₹ 65,00,000
Liabilities = 15,00,000 + 10,00,000 + 5,00,000
= ₹ 30,00,000
Owner’s equity = 65,00,000 – 30,00,000
= ₹ 35,00,000
Therefore, Hari’s value in the business is worth ₹35 Lakhs or 3.5 million
To view more questions on Owner's Equity, refer to:
https://brainly.com/question/14236545
#SPJ4
