The total assets of Capp Co. are $600,000 and its liabilities are equal to two-thirds of its total assets. What is the amount of Capp Co.’s owner’s equity?
$200,000
120,000
To find the amount of Capp Co.'s owner's equity, we need to subtract its liabilities from its total assets.
Given that the total assets of Capp Co. are $600,000, we can calculate the liabilities as two-thirds of the total assets.
Liabilities = (2/3) * Total Assets
Liabilities = (2/3) * $600,000
Liabilities = $400,000
Now, we can find the owner's equity by subtracting the liabilities from the total assets:
Owner's equity = Total Assets - Liabilities
Owner's equity = $600,000 - $400,000
Owner's equity = $200,000
Therefore, the amount of Capp Co.'s owner's equity is $200,000.