Question

The total assets and total liabilities (in millions) of Keurig Green Mountain, Inc. and Starbucks Corporation follow: Keurig Green Mountain StarbucksAssets $4,002 $12,446Liabilities 1,288 6,628Determine the owners’ equity of each company.

Answer 1

Keurig Green Mountain Inc. = 4,002 - 1,288 = 2,714

Starbucks Corporation = 12,446 - 6,628 = 5,818

Step-by-step explanation:

Accounting Equation Formula

Assets = Liabilities + Owner's Equity

Clearing Owner's Equity:

Owner's Equity = Assets - Liabilities

Based on the double-entry system, the accounting equation shows that the total amount of resources available to the company for developing its activities (Assets) is equal to the sources that finance them, creditors (Liabilities) and shareholders (Owner´s Equity).