Answer to Question #305466 in Accounting for Abreham

Question

on june 31, 2010 the statment of financial position of music Depot showed cash $11,000, accounts receivable $1,500 supplies $900, equipment $10,000 accounts payable $2600, during september, the following transactions occured . July 1 Lee chang made an additional investment in music Depot by depositing $2500 in music Depot,s cheeking account

Answer 1

Equity is a section of the balance sheet, reflecting the residual claim of the founders to the legal entity they created. It can decrease or increase depending on additional investments in the company and the results of its own activities. In this case, the equity increased as additional investment from the founder was involved. As a result, equity increased by $ 2,500