Clean and Fresh Laundromat Has Assets of $120,000 and Liabilities

question 28

Multiple Choice

Clean and Fresh Laundromat has assets of $120,000 and liabilities of $35,000. Determine the amount of owner's equity.

• A) $42,500
• B) $155,000
• C) $85,000
• D) None of the answers listed

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Definitions:

Debit Memo

A document issued by a buyer to a seller to correct errors, reduce amounts owed, or return funds in the case of an overpayment.

Perpetual Inventory System

An inventory management system where updates are made continuously as transactions occur, keeping a real-time track of inventory levels.

Freight Charges

Costs associated with the transportation of goods, typically paid by the shipper to the carrier.

Inventory Purchase

The acquisition of goods and materials that a company holds for the purpose of resale or production.