Respuesta :
Answer:
$53,000
Explanation:
The accounting equation gives the relationship between the 3 elements of the balance sheet namely; assets, liabilities and equity as shown below.
Assets = Liabilities + Equity
Given that On March 1, ABX Company’s assets are $104,000 and its liabilities are $34,000 then on that day
Equity = $104,000 - $34,000
= $70,000
If On March 5, ABX is fined $17,000 for failing emission standards. ABX immediately pays the fine in cash.
This will result in a debit to fines and penalties (p/l) and a credit to cash. Thus, assets and equities reduce by $17,000
After the fine is paid, the amount of equity for ABX
= $70,000 - $17,000
= $53,000
The correct statement is that the equity for ABX after the payment of the fine will be $53,000. This is able to be calculated by using the formula for calculation balance sheet tallying method.
The balance sheet of a business consists of assets and equities and liabilities. The amount of assets at the end of the accounting year is equal to the amount of equities and liabilities.
Calculation of equities in the balance sheet
- The formula for the calculation of tallying the balance sheet at the end of an accounting period can be done as,
- [tex]\rm Assets= Equities+ Liabilities\\ \\ Equities= Assets- Liabilities[/tex]
- Using the given information, we know that on March 1st assets are $104,000 and the liabilities are $34,000, so the equities will be,
- [tex]\rm Equities= 104000-34000\\ \\ \rm Equities=\$70000[/tex]
- However, the equities of ABX as on March 5th after payments of fine will be as the cash balance of the asset side reduces, so, total assets will be $87,000.
- Now the equities as on March 5th will be,
- [tex]\rm Equities= \$87000-34000\\ \\ \rm Equities= \$53000[/tex]
Hence, the equities of ABX as on March 5th will be $53,000.
Learn more about equities and balance sheet here:
https://brainly.com/question/894251
