Purchase Solution

Calculating Owner's Equity/Liabilities/Assets

Not what you're looking for?

Ask Custom Question

Using the accounting equation, answer each of the following independent questions.

1. Burlin Company starts the year with $100,000 in assets and $80,000 in liabilities. Net income for the year is $25,000, and no dividends are paid. How much is owners' equity at the end of the year?

2. Chapman Inc. doubles the amount of assets from the beginning to the end of the year. Liabilities at the end of the year amount to $40,000 and owners' equity is $20,000. What is the amount of Chapman's assets at the beginning of the year?

3. During the year, the liabilities of Dixon Enterprise triple in amount. Assets at the beginning of the year amount to $30,000, and owners' equity is $10,000. What is the amount of liabilities at the end of the year?

Purchase this Solution

Solution Summary

The solution calculates the owner's equity and other accounting values for different companies using several financial details from the previous year.

Solution Preview

The accounting equation is Assets=Liabilities + Equity, A=L+E

1. A=L+E
The company starts with $100,000 in equity, so A=$100,000
The company starts with $80,000 in liabilities, so L=$80,000
So, at the beginning of the year, $100,000=$80,000+E; so E=$20,000
If net income is ...

Purchase this Solution


Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Motivation

This tests some key elements of major motivation theories.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Learning Lean

This quiz will help you understand the basic concepts of Lean.