If total assets are $500,000 and total liabilities are $300,000 with a $20,000 write-off due to obsolescence, what is the new total equity?

To determine the new total equity after accounting for the write-off due to obsolescence, we can begin with the basic accounting equation, which states that Total Assets = Total Liabilities + Total Equity.

Initially, total assets are $500,000, and total liabilities are $300,000. From this information, we can calculate the initial total equity before the write-off:

Total Equity = Total Assets - Total Liabilities

Total Equity = $500,000 - $300,000

Total Equity = $200,000

Next, we need to address the $20,000 write-off due to obsolescence. A write-off reduces the value of total assets, as it represents a loss in value for assets that are no longer useful or can’t be sold at their original value. Thus, total assets will now be decreased by the amount of the write-off:

New Total Assets = Original Total Assets - Write-off

New Total Assets = $500,000 - $20,000

New Total Assets = $480,000

Now, we still have total liabilities at $300,000, which hasn't changed. To calculate the new total equity after applying the write-off, we can use the accounting equation again:

New Total Equity