Asked by Carlos Trejo on Apr 29, 2024
Verified
Use the accounting equation to answer each of the independent questions below.?
(a) At the beginning of the year, Norton Company's assets were $75,000 and its owner's equity was $38,000. Duringthe year, assets increased by $18,000 and liabilities increased by $4,000. What was the owner's equity at theend of the year??
(b) At the beginning of the year, Turpin Industries had liabilities of $44,000 and owner's equity of $66,000. If assetsincreased by $10,000 and liabilities decreased by $5,000, what was the owner's equity at the end of the year?
Owner's Equity
The residual interest in the assets of a business after deducting liabilities; represents the owner's claim on the business assets.
Liabilities
Financial obligations a company owes to outside parties.
Assets
Resources owned or controlled by a business, which are expected to produce future economic benefits.
- Utilize the accounting equation to calculate the overall totals of assets, liabilities, and owner's equity.
- Determine the overall financial gain or loss by examining modifications in capital and disbursements.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
(a) $75,000 ? $38,000 = $37,000 beginning of year liabilities ($75,000 + $18,000) ? ($37,000 + $4,000) = $52,000 end of year owner's equity?
(b) $44,000 + $66,000 = $110,000 beginning of year assets ($110,000 + $10,000) ? ($44,000 ? $5,000) = $81,000 end of year owner's equity
(b) $44,000 + $66,000 = $110,000 beginning of year assets ($110,000 + $10,000) ? ($44,000 ? $5,000) = $81,000 end of year owner's equity
Learning Objectives
- Utilize the accounting equation to calculate the overall totals of assets, liabilities, and owner's equity.
- Determine the overall financial gain or loss by examining modifications in capital and disbursements.