Calculating Net Assets in Accounting
If total assets equal $295,000, total liabilities are $165,000, and total equity equals $130,000, then net assets equals:
Final answer:
The net worth, or net assets, of the company is calculated by subtracting its total liabilities from its total assets, which yields $130,000.
Explanation:
In accounting, the net worth of a company is calculated as the company's total assets minus total liabilities. This concept also applies to the net worth of a bank. Given the total assets of $295,000 and total liabilities of $165,000, we subtract liabilities from assets to determine the net worth: $295,000 - $165,000 equals $130,000 in net worth.
This matches the provided total equity, which is another term for net worth. Therefore, net assets equal the total equity, which is $130,000.
If total assets equal $295,000, total liabilities are $165,000, and total equity equals $130,000, then net assets equals: The net worth, or net assets, of the company is calculated by subtracting its total liabilities from its total assets, which yields $130,000.