A bakery reports total liabilities of $70,150 and total owners' equity of $78,750. What must its total assets equal?

1. The basic accounting equation is reflected in the three totals on a balance sheet. 2. Assets equal liabilities plus owners' equity. 3. Total liabilities are $70,150. 4. Total owners' equity is $78,750. 5. Add them: $70,150 plus $78,750 equals $148,900, so total assets are $148,900. 6. Reporting $8,600 subtracts the two totals instead of adding them, which is the classic slip on this equation. 7. Reporting either $70,150 or $78,750 alone names one side of the funding while ignoring the other. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.4 The Balance Sheet_