Multiple Choice
At the base of the corporate social responsibility (CSR) pyramid is:
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1. Introduction to Accounting
Business Organization
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Two partners own equal shares in a business worth a total of \$120,000. How much is each partner's equity in the business?
A
\$90,000
B
\$60,000
C
\$30,000
D
\$120,000
Verified step by step guidance1
Step 1: Understand the problem. The business is worth a total of \$120,000, and there are two partners who own equal shares. This means the equity of each partner is divided equally.
Step 2: Recall the formula for calculating equity when ownership is shared equally: Equity per partner = Total business value ÷ Number of partners.
Step 3: Substitute the given values into the formula. Here, the total business value is \$120,000, and the number of partners is 2.
Step 4: Perform the division operation: \$120,000 ÷ 2. This will give the equity of each partner.
Step 5: Verify the result by ensuring that the sum of both partners' equity equals the total business value (\$120,000).
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