Asked by Megan Quinn on May 20, 2024
Verified
Martin Blair is the owner and operator of Martin Consultants. At December 31 of the current year, Martin Consultants has assets of $430,000 and liabilities of $205,000. Using the accounting equation and considering each case independently, determine the following:?
(a) Martin Blair, capital, as of December 31.
(b) Martin Blair, capital, as of December 31 of the next year, assuming that assets increased by $12,000and liabilities increased by $15,000.
(c) Martin Blair, capital, as of December 31 of the next year, assuming that assets decreased by $8,000and liabilities increased by $14,000.
Accounting Equation
The fundamental formula in accounting that represents the relationship between an entity's assets, liabilities, and equity (Assets = Liabilities + Equity).
Liabilities
Financial obligations or debts that a company owes to others, payable in money, goods, or services.
- Execute the calculation of total assets, liabilities, and owner's equity by employing the accounting equation.
- Calculate net income or loss based on changes in capital and withdrawals.
Verified Answer
BK
BENNY KIWELU.May 23, 2024
Final Answer :
(a) $430,000 ? $205,000 = $225,000
(b) ($430,000 + $12,000) ? ($205,000 + $15,000) = $222,000
(c) ($430,000 ? $8,000) ? ($205,000 + $14,000) = $203,000
(b) ($430,000 + $12,000) ? ($205,000 + $15,000) = $222,000
(c) ($430,000 ? $8,000) ? ($205,000 + $14,000) = $203,000
Learning Objectives
- Execute the calculation of total assets, liabilities, and owner's equity by employing the accounting equation.
- Calculate net income or loss based on changes in capital and withdrawals.