What is the total equity if the stock value is $70,000 and the debit balance is $30,000?

To determine total equity, you need to subtract the debit balance from the stock value. The formula to calculate total equity is:

Total Equity = Stock Value - Debit Balance

In this case, the stock value is $70,000, and the debit balance is $30,000. By applying the formula:

Total Equity = $70,000 - $30,000 = $40,000

This calculation shows that the total equity is $40,000, confirming that this is the correct answer. This concept relies on understanding how the values of stock and any outstanding debts or balances relate to the overall equity of an entity, which represents the net worth or ownership stake after liabilities have been deducted from assets.