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Accounting 25th Edition by Carl Warren, James Reeve, Jonathan Duchac
Edition 25ISBN: 978-1285069609Accounting 25th Edition by Carl Warren, James Reeve, Jonathan Duchac
Edition 25ISBN: 978-1285069609 Exercise 2
Accounting equation
Megan Newell is the owner and operator of Ultima LLC, a motivational consulting business. At the end of its accounting period, December 31, 2013, Ultima has assets of $942,000 and liabilities of $584,000. Using the accounting equation, determine the following amounts:
a. Owner's equity as of December 31, 2013.
b. Owner's equity as of December 31, 2014, assuming that assets increased by $113,000 and liabilities Increased by $44,000 during 2014.
Fritz Evans Is the owner and operator of Be-The-One, a motivational consulting business. At the end of its accounting period, December 31, 2013, Be-The-One has assets of $395,000 and liabilities of $97,000. Using the accounting equation, determine the following amounts:
a. Owner's equity as of December 31, 2013.
b. Owner's equity as of December 31, 2014, assuming that assets decreased by $65,000 and liabilities Increased by' $36,000 during 2014.
Megan Newell is the owner and operator of Ultima LLC, a motivational consulting business. At the end of its accounting period, December 31, 2013, Ultima has assets of $942,000 and liabilities of $584,000. Using the accounting equation, determine the following amounts:
a. Owner's equity as of December 31, 2013.
b. Owner's equity as of December 31, 2014, assuming that assets increased by $113,000 and liabilities Increased by $44,000 during 2014.
Fritz Evans Is the owner and operator of Be-The-One, a motivational consulting business. At the end of its accounting period, December 31, 2013, Be-The-One has assets of $395,000 and liabilities of $97,000. Using the accounting equation, determine the following amounts:
a. Owner's equity as of December 31, 2013.
b. Owner's equity as of December 31, 2014, assuming that assets decreased by $65,000 and liabilities Increased by' $36,000 during 2014.
Explanation
Verified
Verified
The relationship between assets, liabilities and owner's equity is given below:
Assets = Liabilities + Owner's Equity
Therefore,
Owner's equity = Assets - Liabilities
(2A) a. Owner's equity = Assets - Liabilities
= $358,000
(2A) b. Owner's equity after necessary adjustments as of December 31, 2014 is calculated below -:
Owner's equity = Assets - Liabilities
Owner's equity = ($942,000 + $113,000) - ($584,000 + $44,000)
= $1,055,000 - $592,000
= $463,000
(2B) a. Owner's equity = Assets - Liabilities
= $ 298,000
(2B) b. Owner's equity after necessary adjustments as of December 31, 2014 is calculated below -:
Owner's equity = Assets - Liabilities
Owner's equity = ($395,000 - $65,000) - ($97,000 + $36,000)
= $330,000 - $133,000
= $197,000
Assets = Liabilities + Owner's Equity
Therefore,
Owner's equity = Assets - Liabilities
(2A) a. Owner's equity = Assets - Liabilities
= $358,000 (2A) b. Owner's equity after necessary adjustments as of December 31, 2014 is calculated below -:
Owner's equity = Assets - Liabilities
Owner's equity = ($942,000 + $113,000) - ($584,000 + $44,000)
= $1,055,000 - $592,000
= $463,000
(2B) a. Owner's equity = Assets - Liabilities
= $ 298,000 (2B) b. Owner's equity after necessary adjustments as of December 31, 2014 is calculated below -:
Owner's equity = Assets - Liabilities
Owner's equity = ($395,000 - $65,000) - ($97,000 + $36,000)
= $330,000 - $133,000
= $197,000
Accounting 25th Edition by Carl Warren, James Reeve, Jonathan Duchac
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