The medical office’s owner’s equity account from the balance sheet will not be equal to the Personal Physician New Worth calculation from the article. Equity account and net worth are measures of two different financial elements. In addition, the values are fated to be different owing to the two differences in income, taxes, expenditure patterns, and investment aptitude. Unless these components result in similar calculated figures for net worth and equity account values, there is a negligible probability that the outcomes of the calculations will yield the same values. That notwithstanding, there is more to the calculations and ratio of sharing that makes the values different.
Equity account refers to a measure of an individual’s interest in an investment such as a company and so forth. It only covers a percentage of the total net income dividend among shareholders, such as dividends (Long & Perry, 2014). In that sense, the equity account distributions by ratio and percentage calculations limits lowers the net income. For instance, if the net income of a company is $100 and is to be shared among 10 people, each having equal contribution in the investment, the equity account for each person will be $1.
Delegate your assignment to our experts and they will do the rest.
The personal net worth calculation for the same figure will provide entirely different value or similar depending on the values of the physician's liabilities and assets. Net worth refers to the amount obtained after adding all financial and non-financial assets and subtracting all liabilities, both secured ad none secured (Gale, 2013). In this case, using tentative values, if the physician has an asset amounting to $100 and a liability totaling $50, his net worth will be equal to $50. The amount is shared only to one person, and that is himself. Unlike the first scenario, where each person would have received $5 from the accrued profit, the net worth remains to the physician. In addition, there are other components of an individual's achievements, such as certificates that affect the person’s net worth, which are not accounted for in the asset equity.
In conclusion, the variables considered in the calculations of the equity asset and the ratio skews the results of each individual, such that they cannot be equal. Unless otherwise, the medical officer’s equity account from the balance sheet will not be equal to the Personal Physician New Worth calculation.
References
Gale, P. (2013). Your network is your net worth: Unlock the hidden power of connections for wealth, success, and happiness in the digital age. Simon and Schuster.
Long, M., & Perry, G. A. (2014). QuickBooks 2014 on Demand. Pearson Education.
