What is the owner's equity for Smith Construction at the end of 2020?

To determine the owner's equity for Smith Construction at the end of 2020, it's essential to understand the concept of owner's equity, which represents the owner's claim on the assets of the business after all liabilities have been settled. Owner's equity can be calculated with the equation:

Owner's Equity = Total Assets - Total Liabilities.

In this scenario, if $520,000 has been identified as the owner's equity, this suggests that after assessing the assets and liabilities of Smith Construction, the net amount attributable to the owner stands at that figure.

Choosing $520,000 as the correct answer indicates that it accurately reflects the financial position of the company, showing a reasonable balance between assets and liabilities. The other figures, while they represent potential financial positions, do not correlate with the data provided or the calculations leading to owner's equity at the specified time. Understanding how these components work together is crucial for interpreting financial statements and assessing a company's health.