If a business has total assets of 500,000 and total liabilities of 300,000, and 20,000 of net fixed assets are written off, what is the total equity after the write-off?

• A. 200,000
• B. 220,000
• C. 300,000
• D. 180,000

Answer: (D)

On a balance sheet, equity equals assets minus liabilities. A write-off reduces assets while liabilities stay the same, so equity falls by the same amount.

Start with assets 500,000 and liabilities 300,000, giving equity 200,000. The write-off reduces assets by 20,000 to 480,000. With liabilities still 300,000, equity becomes 480,000 − 300,000 = 180,000.

So, total equity after the write-off is 180,000.