A company was started last year when the shareholders invested $70 cash into the company. At that time, the organization also borrowed $30 cash from a local bank. The organization used $80 cash to purchase inventory for $80. This year the company sold all of the inventory for $55 cash. (That is not a typographical error; the amount received for all of the inventory was only $55 cash.)

Assuming that there is no interest on the loan, what is true with respect to this companys balance sheet after the sale of the inventory?

The answer is supposedly Owner's Total Equity is $45.