Respuesta :
Answer:
                  Long Print Shop
     Balance sheet for the year ended December 31, 2020
                             Amount in $            Amount in $
Assets
Non-current asset
Equipment                                           20,000
Current assets
Merchandise inventory            14,000
Cash                           50,000
Total current asset                                     64,000
Total assets                                          84,000
Liabiities
Accounts payable                                     38,000
Total liabilities                                       38,000
Equity
Capital                                               46,000
Total equity                                          46,000
Total liabilities and equity                               84,000
Explanation:
The accounting equation shows the relationship between the elements of a balance sheet which are assets liabilities and equity. This may be expressed mathematically as
Assets = Liabilities + Equity
While assets include fixed assets, cash, inventories, account receivables etc, liabilities include accounts payable, loans payable, accrued expenses etc.
Equity which represents the amount owed to the owners of the business includes retained earnings (which is the accumulation of the net income/loss over the years less dividends paid) and common shares.
