Question

I need help with this fast. I will post a picture.

Answer 1

I have not taken finance yet, I’m sorry I can’t help. ):

Answer 2

@angle wanna take a crack at it?

Answer 3

Hi @ASIAX :)

You have the right idea with equipment now being valued at 7000

Answer 4

This means that after the first step, Cash would have 14000

at the second step, what do you think happens?

Answer 5

not sure b/c I don't understand why it goes to 17250 for total assets also I cannot figure out what to do with accounts payable

Answer 6

yeah, I see how it can be confusing :)

Accounts Payable means "money you owe to other people" basically.

This means that if you spend Cash on Accounts Payable, the amount you now owe goes down.

This means that Cash goes from 14000 to 11000
and Accounts Payable goes from 4750 to 1750

Answer 7

for example,
if I owe you 5 dollars
and I pay you 3 dollars
I have 3 less cash, but now I still owe you 2 dollars

Answer 8

oh i see

Answer 9

what exactly is Owner's Equity: Investment then?

Answer 10

Honestly, I don't think the question phrased that part very well :(

I believe "Owner's Equity" should reflect "salary", but that would mean the Owner's Equity should go up... but then the 17250 total would be wrong.

To get the 17250 total, the Owner's Equity needs to go down by 750
I believe the reasoning behind it might have to do with it being an "Investment"

Perhaps like: The company sets aside the amount of money they Plan on paying the Owner. Every time the owner does get paid, cash goes to the Owner, and the money they now plan on giving in the future also goes down.
It's similar to the "owe"ing example I gave above. Like, the company "owe"s the Owner his salary.

Answer 11

for example

I work for a company and they plan on paying me 10 dollars.
At my first paycheck, they pay me 3 dollars.
So the company's cash goes down by 3 to me
and the amount of money they have to plan for to pay me in the future is 7

Answer 12

Thanks!