Assets and liabilities of a company are \( \$ 220,000 \) and \( \$ 50,000 \), respectively. Determine owner's equity using the accounting equation. a. \( \$ 220,000 \) b. \( \$ 50,000 \) c. \( \$ 270,000 \) d. \( \$ 170,000 \)

To determine owner's equity, we can use the accounting equation: \[ \text{Owner's Equity} = \text{Assets} - \text{Liabilities} \] In this case, the assets are \( \$ 220,000 \) and the liabilities are \( \$ 50,000 \). Plugging in the values: \[ \text{Owner's Equity} = 220,000 - 50,000 = 170,000 \] So, the correct answer is \( d. \, \$ 170,000 \). The accounting equation is like a balancing act—assets on one side and liabilities plus owner's equity on the other. Just like juggling, if one side tips, the other needs to adjust! This balance is crucial for financial reporting and keeping a clear picture of a company's financial health. To make the most of your accounting practices, remember to always double-check your figures. A common mistake is mixing up the values for assets and liabilities, which can lead to incorrect calculations for owner's equity. Also, misreading financial statements is no fun—be sure to take your time and fully understand each term!