1. Consider a manufacturing company's balance sheet with the following details:
   1. Total assets include property, plant, and equipment, inventory, and accounts receivable.
   2. Total liabilities consist of accounts payable, long-term debt, and accrued expenses.
   3. Owner's equity reflects the retained earnings and contributed capital.

Explain how each category contributes to the balance sheet and compute the owner's equity if the total assets amount to $5,000,000 and total liabilities are $2,500,000.